healthcare costing standards for england information ... · • costing methods: focus on high...

Healthcare costing standards for England

Information requirements and costing processes

Development version 2

Mental health

We support providers to give patients

safe, high quality, compassionate care

within local health systems that are

financially sustainable.

1 | > Contents

Contents

Introduction .................................................................................. 2

Information requirements ........................................................... 4

IR1: Collecting information for costing ........................................... 5

IR2: Managing information for costing ......................................... 30

Costing processes ..................................................................... 44

CP1: Role of the general ledger in costing ................................... 45

CP2: Clearly identifiable costs ..................................................... 48

CP3: Appropriate cost allocation methods ................................... 69

CP4: Matching costed activities to patients .................................. 81

CP5: Reconciliation...................................................................... 92

CP6: Assurance of cost data ....................................................... 97

Mental health costing standards: Introduction

2 | > Introduction

Introduction

This second version of the Healthcare costing standards for England – mental

health should be applied to 2017/18 data and used for all national cost collections.

It supersedes all earlier versions. All paragraphs have equal importance.

These standards have been through two development cycles involving

engagement, consultation and implementation. There will be a third development

cycle before the 2018/19 cost collection. We would like to thank all those who have

contributed to the standards over the two development cycles.

The main audience for the standards is costing professionals but they have been

written with secondary audiences in mind, such as clinicians, informatics and

finance colleagues.

There are three types of standards for mental healthcare costing:

• information requirements: describe the information you need to collect for

costing.

• costing processes: describe the costing process you should follow.

The above two sets of standards, contained in this document, are the core

standards and should be implemented in numerical order before the other type of

standard:

• costing methods: focus on high volume and high value services or

departments. These should be implemented after the information

requirements and costing processes, and prioritised based on the value

and volume of the service for your organisation.

We have ordered the standards linearly but, as aspects of the costing process can

happen simultaneously, where helpful we have cross-referenced to information in

later standards. We have adopted the same numbering as for the acute standards:

this means there are gaps in the sequential order where a standard relevant to the

acute sector is not relevant to the mental health sector.

Mental health costing standards: Introduction

3 | > Introduction

The technical document contains the information required to implement the

standards, which is best presented in Excel. In this document, cross-references to

spreadsheets (eg Spreadsheet CP3.3) refer to the technical document.

We also cross-reference to relevant costing principles. These principles should

underpin all costing activity.1

We have produced a number of tools and templates to help you implement the

standards. These are available to download.

Please note: while we refer to ‘patients’ in the context of patient-level costing, we

recognise that people who access mental health services prefer to be referred to as

service users, clients or residents. The use of the term patient across all sectors

allows us to maintain consistent standards throughout an individual’s health and

social care pathway.2

If you would like to give us feedback on the standards please complete the

evidence pro forma and send it to [email protected]

1 For detail see The costing principles

2 Note: traditionally, the mental health sector did not use the term ‘episode’ for an inpatient stay. The

MHMDS does now use this term, so episode is used throughout the Healthcare costing standards for England – mental health.

https://improvement.nhs.uk/resources/approved-costing-guidance-standards/#h2-tools-and-templates-to-help-implementing-the-standards

https://improvement.nhs.uk/resources/approved-costing-guidance-standards/#h2-tools-and-templates-to-help-implementing-the-standards

mailto:[email protected]

https://improvement.nhs.uk/resources%20/approved-costing-guidance

Mental health information requirements

4 | > Information requirements

Information requirements

IR1: Collecting information for costing

IR2: Managing information for costing


5 | > IR1: Collecting information for costing

IR1: Collecting information for costing

Purpose: To set out the minimum information requirements for patient-level costing.

Objectives

1. To ensure providers collect the same information for costing, comparison with

their peers and collection purposes.

2. To support the costing process of allocating the correct quantum of cost to the

correct activity using the prescribed cost allocation method.

3. To support accurate matching of costed activities to the correct patient,3

admission, attendance or contact.

4. To support local reporting of cost information by activity in the organisation’s

dashboards for business intelligence.

Scope

5. This standard specifies the minimum requirement for the patient-level4 activity

feeds as prescribed in the Healthcare costing standards for England – mental

health.

3 While we refer to patients in this context of patient-level costing, we recognise that people who

access mental health services prefer to be referred to as service users, clients or residents. 4 Not all feeds are at the patient level. This is a generic description for the collection of feeds

required for the costing process. The actual level of the information is specified in the detail

below: for example, the medicines feed may be at patient or ward level.



Overview

6. The standards describe two main information sources for costing:

• patient-level feeds

• relative weight values.

7. The five patient-level feeds for mental health services are:

• admitted patient care (APC)

• non-admitted patient care (NAPC)

• supporting contacts

• medicines dispensed5

• clinical multidisciplinary team (MDT).

8. Any costs not covered in the patient-level feeds need relative weight values or

other local information sources to allocate the costs.

9. One way to store relative weight values in your costing system is to use

statistic allocation tables where the standards prescribe using a relative

weight6 to allocate costs.

10. You may be using additional sources of information for costing. If so, continue

to use these and document them in your costing manual (Worksheet 1.2:

Additional information source).

11. The standards provide the following required for costing:

• activities which have occurred – for example, the NAPC feed will itemise all

contacts made by the community mental health nursing team, and this

information tells the costing system which activities to include in the costing

process

• the cost driver to use to allocate costs – for example, eating disorder bed

ward minutes

5 Organisations that do not have their own pharmacy should still have patient-level drug information.

6 See Standard CP3: Appropriate cost allocation methods paragraphs 42 to 66 for more information

on relative weight values.



• the information to use to weight costs – for example, the drug cost included

in the medicines dispensed feed

• information about the clinical care pathway – for example, information about

outsourced therapy contacts can be used to allocate specific costs in the

costing process.

12. Column C in Spreadsheet IR1.1 lists the patient-level activity feeds required

for costing.

13. Columns D and E in Spreadsheet IR1.2 give the field name and required data

items for each feed, following national naming conventions for the Mental

Health Services Data Set (MHSDS) and other datasets. To build the relevant

patient-level information costing system (PLICS) feed, you may need to

discuss the matching of some local field names with your service teams or

informatics department.

14. We recognise that because of the way care is provided or because of

information governance controls, you may not be able to identify the cost of

care for some patients. It is important to keep in mind that our aim is to cost a

patient, not the patient. This applies to patients accessing sexual health

services and gender dysphoria services. We recognise that we will collect

data for a patient accessing the service and not all data relating to each

patient.

15. See Standard IR2: Management of information for costing to assess the

availability of the required information specified in this standard and for how to

manage it.

16. All patient-level activity feeds need to contain information that can be used to

match the costed activity to a patient episode,7 attendance or contact; such as

the unique episode/contact ID, local patient number, contact date, point of

delivery, ward/team or care professional.8 For example, ‘local patient identifier

(extended)’ is the unique patient reference in the MHSDS.

7 Note: traditionally, the mental health sector did not use the term ‘episode’ for an inpatient stay. The

MHMDS does now use this term, so episode is used throughout the Healthcare costing standards for England – mental health. In reporting terms, episodes can be aggregated up to spells or other measures.

8 A care professional is someone who provides care to patients – a care provider, such as a doctor,

nurse, social worker or therapist.



17. Note that because the matching hierarchy is not sector specific, integrated

providers can have a single set of matching rules. This means that while the

hierarchy levels in Spreadsheet CP4.1 are not sequential, they should be

completed in order, starting with the lowest number. For example, the

medicines feed starts at level 7 and includes levels 8, 9, 10, 16, 17 and 18.

18. Spreadsheet IR1.1 describes the detail required for the activity and patient

information data. The specific data fields required for each feed can be found

in Spreadsheet IR1.2.

19. You should work with your informatics department to understand the different

types of activity captured and reported against each data feed. This will help

ensure you allocate the correct costs and allocate them in appropriate

proportions, and that activity is reported correctly in your patient-level

reporting dashboard.

20. Some data fields in the feeds will be available from the MHSDS. This is a

relational database and contains many fields not required for costing. You

should import the required fields into PLICS, not the whole MHSDS. Also note:

• where field names are duplicated in the MHSDS, use the MHSDS code

shown in column G – ‘MHSDS unique ID’ – in Spreadsheet IR1.2

• for some fields you may need to add local data or derive data from other

sources to meet all the PLICS information requirements.

Description of patient-level feeds

21. Three types of feed support the matching process and are detailed in column

E in Spreadsheet IR1.1:

• master feeds: the core patient-level activity feeds that the other feeds are

matched to, eg the APC and NAPC feeds

• auxiliary feeds: the patient-level activity feeds that are matched to the

master feeds, eg medicines dispensed feed; auxiliary feeds may also

include other feeds that can be matched to the master feeds

• standalone feeds: the patient-level activity feeds that are not matched to

any episode of care but are reported at service-line level in the

organisation’s reporting process, eg the MDT feed.



22. The feeds are numbered sequentially for all sectors. Therefore some feed

numbers will not be used in the mental health costing standards as the feed to

which they refer is not required.

23. Spreadsheet IR1.2 contains the activity data fields required for the costing

standards.

24. Your informatics department is best placed to obtain the data required from

the most appropriate source, but to help you find out what information your

organisation is already collecting, refer to Spreadsheet IR2.1.

25. Depending on how your organisation stores and manages information, the

names of the data feeds and fields in Spreadsheet IR1.2 may differ from those

used locally. The data items themselves should be the same, to conform to

national submission requirements.

26. If your organisation is not collecting and using the minimum required activity

data feeds in costing, you need to plan for systems to collect this information

with your informatics department and the departments/teams providing the

services. To help you we have provided:

• a transition path (Spreadsheet Transition path) identifying the information

requirements that should be prioritised; this is the information you should

plan to access first

• a mental health information gap analysis template to help you work with

your informatics department to identify and document the information that is

a priority for improvement.

27. You are not required to collect an activity feed if your organisation does not

provide that activity, eg a provider with no inpatient services is not required to

collect the APC feed. You are not required to collect duplicate information in

the individual feeds unless this is needed for costing, matching or collection

purposes.

28. The reason for including each field in a feed is given in columns L, M, N and P

in Spreadsheet IR1.2.

https://improvement.nhs.uk/resources/approved-costing-guidance-standards/



29. The standards prescribe the information to be collected, but not how it is

collected. So if you collect several of the specified feeds in one data source,

you should continue to do so as long as the required information is captured.

30. The prescribed matching rules for all the patient-level feeds are given in

Spreadsheet CP4.1.

31. If the costs of any activity in your data feeds are reported in another

organisation’s accounts, you need to separate the activity from the other

activity provided to your patients. Do this by reporting this activity under ‘cost

and income reconciliation reports’, as described in Spreadsheets CP5.1 and

CP5.2. This prevents your own costs being allocated to this activity, deflating

the cost of your own patients, and is why the field ‘organisation identifier (local

patient identifier’ is included in the APC and NAPC feeds.

32. For internal reporting, this activity can be reported as part of patient pathways,

even though it is at zero cost to the organisation. For example, social workers

are paid by the local authority but their activity is part of the mental health

organisation’s patient pathway.

What you need to implement this standard

• Costing principle 1: Good costing should focus on materiality

• Information gap analysis template

• Spreadsheet IR1.1: Patient-level activity feeds required for costing

• Spreadsheet IR1.2: Patient-level field requirements for costing

• Spreadsheet IR1.3: Supporting contacts feed

• Spreadsheet IR2.1: Data sources available as part of national collection

Approach

Patient-level information for the costing process

33. This section describes each feed, explaining:

• relevant costing standards

• collection source

• feed scope.



34. Work with your informatics department and the service teams providing data

to understand the different types of activity in each feed and to ensure costs

are allocated correctly to activity. Also ensure that activity is reported correctly

in your patient-level reporting dashboard.

35. The MHSDS sourced fields required for APC and NAPC PLICS feeds are

either mandatory or required fields in the MHSDS. The feeds for PLICS are

shown in Spreadsheet IR1.2 and must be populated to facilitate completion of

the costing standards.

36. Use the MHSDS ID and IAPT ID (as appropriate) for each field, as shown in

Spreadsheet IR1.2, when building your feeds. This will ensure the fields are

pulled from a consistent location and the PLICS collection will match to the

MHSDS dataset once submitted.

37. Perform an information gap analysis to identify areas without information.

Work with your service teams and informatics department to plan how to

complete the MHSDS dataset and access other sources of missing data.

38. The required fields are shown in Spreadsheet IR1.2. Column C identifies the

dataset for each, column L the fields used for costing, and columns M, N and

P the fields for matching, business intelligence and collection.

39. Integrated providers should identify the services they provide for different

sectors, and build feeds to include all these sectors – see Standard CM11:

Integrated providers.

40. Each organisation may hold the required data fields in a data warehouse and

receive the PLICS feed from there.



Feed 1: Admitted patient care

Relevant costing standards

• Standard CM13: Admitted patient care

• Standard CM2: Incomplete patient events

• Standard CM1: Medical staffing

• Standard CM11: Integrated providers

• Spreadsheet IR1.2: Patient-level field requirements for costing

• Spreadsheet IR2.1: Data sources available as part of national collection –

row 5

Collection source

41. This data is collected as part of the nationally collected and mandated

MHSDS.

42. The APC feed is shown in column C of Spreadsheet IR1.2. The fields shown

in column D should be contained in the APC feed to PLICS.

Feed scope

43. All admitted patient episodes within the costing period, including all patients

discharged in the costing period and patients still in bed at midnight on the last

day of the costing period.

44. An episode is a period of responsibility recorded under one care professional.9

45. Costing takes place at hospital episode level as this is the most granular unit

of care recorded in the MHSDS. Each episode includes the relevant

‘resources’ and ‘activities’ as required by the Costing Transformation

Programme (CTP). Episode costing represents responsibility for that patient’s

care by a named professional.

46. The period starting with the ‘start date (care professional admitted care

episode)’ and finishing with the ‘end date (care professional admitted care

episode)’ spans the length of stay used for costing.

9 Hospital episode is defined in the NHS Data Dictionary.

http://www.datadictionary.nhs.uk/data_dictionary/nhs_business_definitions/c/consultant_episode_(hospital_provider)_de.asp?shownav=1?query=hospital+episode&rank=53.04503&shownav=1



47. If the ‘end date (care professional admitted care episode)’ field has not been

completed for a patient, that patient will still be in a bed, and so will be

categorised as an incomplete patient event. See Standard CM2: Incomplete

patient events.10

48. Including patients who are still in a bed reduces the amount of unmatched

activity and ensures that discharged patients are not allocated costs that

relate to patients who have yet to be discharged.

49. Feeds such as Feed 10: Medicines dispensed will contain all the patient-level

activity that has taken place in a month, regardless of whether or not the

patient has been discharged. All these activities can now be costed and

matched to the correct patient whether or not they have been discharged,

building an appropriate view of the costs incurred during a period.

50. A spell is the full length of the inpatient stay – from admission to discharge.11

51. Use the ‘discharge date (hospital provider spell)’ to identify if a patient has

been discharged from the hospital. This is needed to inform a further derived

field of ‘discharge flag’ which is used for the PLICS collection (see Derived

and additional fields below, paragraphs 71 and 72).

52. Many patients will have one episode within one spell, but some will have more

than one episode within one spell. This should not influence the costing

process.

53. The APC feed also includes details for admitted patients, such as ward

admitted to (eg high secure, rehabilitation, etc identified by ‘ward code’). If

these fields cannot be populated from the MHSDS data, they should be

populated from a relevant local source.

54. The service giving the patient care should be identified by ‘service or team

type referred to (mental health)’.

55. The feed must include the date and time stamps to allow the number of

occupied bed minutes to be calculated, and so the ward cost for the time the

patient spent there to be allocated to the patient:

11 Hospital provider spell is defined in the NHS Data Dictionary.

http://www.datadictionary.nhs.uk/data_dictionary/nhs_business_definitions/h/hospital_provider_spell_de.asp?shownav=1?query=hospital+spell&rank=100&shownav=1



• ‘start date (ward stay)’

• ‘start time (ward stay)’

• ‘end date (ward stay)’

• ‘end time (ward stay)’.

56. Every time a patient moves to a different ward/location needs to be captured

using the ward code identifier data field.

57. The fields ‘ward setting type (mental health), intended clinical care intensity

code (mental health)’, and ‘ward security level’ give information about the type

of ward the patient is admitted to.

58. The feed should identify the lead care professional responsible for that patient,

under ‘care professional local identifier’. This will change if an episode ends,

to reflect the different professional responsible for the patient at the different

stages of their pathway.

59. The APC feed will not include details of other care professionals working with

the admitted patient (eg consultant, nurse, therapist, etc), as this information is

not contained in the MHSDS. To capture this information, the supporting

contacts feed should include staff contacts with the patient, according to the

prescribed scenarios in Standards CM1, CM3 and CM13 and including

contacts with therapists, psychologists and specialists, and additional

sessions with medical staff.

60. ‘Main specialty code (mental health)’ is included in the feed to enable

matching for supporting datasets and integrated provider submissions of cost

information.

61. Home leave: some patients may return home for planned or trial periods while

still admitted to an inpatient bed: a practice designed to ensure a bed is

reserved for their care.

62. The MHSDS and therefore the APC dataset include this leave to reflect the

continuing responsibility for the patient. But as far fewer resources are used

during home leave, this time is not costed. Resources/activities should be



applied to patients according to their length of stay net of home leave days.12

See Standard CM13: Admitted patient care.

63. Periods of home leave should be excluded from costing calculations based on

time on the ward calculated using the following fields (as per Spreadsheet

IR1.2):

• ‘start date (home leave)’

• ‘start time (home leave)’

• ‘end date (home leave)’

• ‘end time (home leave)’.

64. Also, by including these home leave fields, home leave can be reported in

local reporting dashboards.

65. The patient's ‘administrative category code’ shows the category of

commissioner for their care, eg private patient, overseas visitor, NHS patient

living outside England, patient funded by the Ministry of Defence. The field is

included for reporting but is not required for the costing process.

66. Administrative category code may change during an episode; for example, the

patient may opt to move from NHS to private healthcare. In such cases, the

start and end dates for each new administrative category period should be

recorded in the APC feed so that patients can be correctly identified and

costed accurately.

67. The feed should contain the patient’s ‘NHS number’, to allow organisations

where patient-level medicines are provided by another NHS organisation to

match the medicines to the episode. This may also be of use in local pathway

costing across organisations.13

68. Where a patient has a care programme approach meeting (CPA) during an

admission, the date of this will be included in the field ‘care programme

approach review date’. See Standard CM9: Multidisciplinary meetings

12

The patient may incur costs during home leave, such as escorting costs. These are described in Standard CM13: Admitted patient care.

13 With appropriate information governance arrangements in place.



69. Where a patient undergoes a medical/physical intervention during their

admission, the field ‘coded procedure and procedure status (SNOMED CT)’

will include a code that identifies the procedure, eg electroconvulsive therapy

(ECT).

Derived and additional fields

70. As the MHSDS is not solely designed for costing purposes, some other fields

need to be included in the APC dataset used for costing, taken from other

fields in the originating data.

71. These fields are:

• ‘discharge flag’ – derived field. This is where the ‘discharge date

(hospital provider spell)’ is null. This is used to indicate whether the

inpatient spell was completed within the financial year.14 This field is used in

the PLICS collection to identify incomplete spells; these can then be

matched and costed appropriately. Valid values are:

1 = Started in previous period and completed in current period

2 = Started in current period and patient not discharged at end of current

period

3 = Start and finished in current period

4 = Started in previous period and patient not discharged at end of current

period.

• ‘Escorted home leave’ – additional field.15 This will need to be populated

from a source other than the MHSDS, to show where escorting costs need

to be allocated during a home leave period. See Standard CM13: Admitted

patient care.

14

This is used by the PLICS collection team at NHS Improvement to reconcile the PLICS submission to the reference costs submission.

15 This field is currently for a superior costing method, but one which will become a prescribed costing method in later versions of the costing standards.



Feed 3: Non-admitted patient care16


• Standard CM3: Non-admitted patient care

• Standard CM1: Medical staffing

• Standard CM14: Group sessions

• Standard CM11: Integrated providers

• Spreadsheet IR2.1: Data sources available as part of national collection. row 5

Collection source

72. This data will come from the nationally collected and recently mandated

MHSDS.

Feed scope

73. The NAPC feed is shown in column C of Spreadsheet IR1.2. Fields with this

identifier should be contained in the NAPC feed to PLICS.

74. This feed includes all patients who had an attendance, contact or care

provided in a non-admitted care setting within the costing period.

75. This feed is designed to be a ‘catch all’ activity feed. It will include

• formal booked ‘clinic’ contacts

• non-admitted patient contacts – informal contacts, drop-in sessions and

outreach services

• other face-to-face contacts, including those in the patient’s residence

• telemedicine consultation, including telephone calls and other telemedicine

contacts such as text, email, video conference, etc17

• ward attenders (outpatient contacts where a patient who does not need full

admission to an inpatient unit is seen in a ward environment)

• daycare (patients attending for general supportive activities throughout a

day, sometimes – but not necessarily – including clinical therapy). They are

16

The feed numbers are used across all sectors. For a full list, see Spreadsheet IR1.1. Integrated trusts can use the ‘likely sector’ filter to reveal the other feeds.

17 www.datadictionary.nhs.uk/data_dictionary/attributes/c/cons/consultation_medium_used

http://www.datadictionary.nhs.uk/data_dictionary/attributes/c/cons/consultation_medium_used



not admitted, but are present for a far longer time than a standard NAPC

contact

• group contacts.

76. The patient identifier field is ‘local patient identifier (extended)’.

77. Fields ‘care contact identifier’ and ‘care contact date’ are used for the PLICS

collection and also to match other feeds to the NAPC contact. ‘Care contact

time’ is not required for the PLICS collection for MHSDS data, but is required

for the improving access to psychological therapies (IAPT) dataset (Feed 16)

and so should be included in the NAPC feed for consistency.

78. Where the ‘care contact date’ and the ‘care programme approach review date’

are the same, a CPA meeting has taken place.

79. Data fields in this feed capture details of the location where care was

provided. A combination of the fields ‘service or team type referred to (mental

health)’ and ‘activity location type code’ give a local service and site code.

80. Where community mental health teams (CMHTs) treating patients when they

are admitted to a ward is recorded in the NAPC feed, this should be costed as

a separate contact. These costs should not be absorbed into the admitted stay

by entering these contacts into the supporting contacts feed. See Standard

CM13: Admitted patient care for further detail.

81. Costing of NAPC patient contacts should be a time-based allocation of

resources. Use field ‘clinical contact duration of care contact’. This is the

actual time the contact lasts, and should not include time spent on supportive

work before or after the patient contact, nor travel time. See Standard CP3:

Appropriate cost allocation methods and Standard CM3: Non-admitted patient

care for detail on using duration of patient-facing time and treatment of travel

time, respectively.

82. ‘Main specialty code (mental health)’ is included in this feed to enable

matching for supporting datasets and local reporting of pathway costs.

83. Groups: Sessions for more than one patient will have a different cost from

that for a single patient contact. See Standard CM14: Group sessions. Fields

used in the costing process are:



• the NAPC feed captures whether or not the contact was a group contact –

use field ‘group therapy indicator’

• the field ‘clinical contact duration of group session’ shows the group session

duration

• the field ‘number of group session participants’ gives the number of patients

in the group session.

84. The NAPC feed contains data fields that capture when a patient did not attend

(DNA) or was not present at the location of the contact, or in the case of a

child/vulnerable adult was not brought (WNB) to their NAPC appointment. Use

field ‘attended or did not attend code’. DNAs are to be excluded from the cost

collection, but the field is included for local reporting. See Standard CM3: Non-

admitted patient care.

85. The NAPC feed uses field ‘consultation medium used’ to indicate whether a

contact was face to face, or using telemedicine (including telephone calls,

video conference, text, email or online patient model). See Standard CM3:

Non-admitted patient care for more information.

86. The patient's ‘administrative category code’ shows the category of

commissioner for their care, eg private patient, overseas visitor, NHS patient

living outside England and patient funded by the Ministry of Defence. The field

is included for reporting but is not recognised by the costing process. The

administrative category code does not normally change during a NAPC

contact.

87. The field ‘language code (preferred)’ is used to allocate interpreting costs to all

patients with a language code of ‘not English’.

88. We recognise that not all NAPC activity is captured in the MHSDS. You need

to work with your informatics department and the department responsible for

the data to get the relevant activity information and include additional fields in

the NAPC feed. For example:

• ‘multiprofessional contact’: The MHSDS currently does not identify

multidisciplinary contacts separately from single professional contacts. See

Standard CM9: Multidisciplinary meetings. This information is important for



allocating cost from the relevant resources, and a field has been added for

local population.

Feed 7: Supporting contacts18

Collection source

89. This data needs to be collected locally.

Feed scope

90. All patients who had contacts from anyone other than their named care

professional within the costing period.

91. A patient can be expected to have contact with their named care professional

during their admission as part of standard ward rounds and ward care.

However, they will also have single professional contacts with other care

professionals, and take part in multiprofessional and/or multidisciplinary

contacts during their episode – such as occupational therapy sessions and

CPA meetings.

92. The supporting contacts feed is designed to reflect the multifaceted nature of

a patient’s pathway and costs associated with it. The detail and accuracy of

the final patient cost are improved by including these activities in the costing

process.

93. Staff who may perform supporting contacts are listed in column A in

Spreadsheet IR1.3, but this is not an exhaustive list.

94. Spreadsheet CP4.1 contains prescribed matching rules for this feed.

95. Fields used in the costing process are:

• ‘local patient identifier (extended)’ – for matching the patient to the

supporting contact

• ‘contact start date and time’ – for matching, and to calculate the contact

duration

18




• ‘contact end date and time’ – for matching, and to calculate the contact

duration

• ‘care contact duration’ – for allocating resources to activities

• ‘healthcare professional code’ – for allocating the correct resource for the

staff member/type to activities

• ‘contracted-out indicator’ – to identify costs for a patient that are shown

separately in the general ledger because services have been purchased

from another provider

• ‘group contact’ – to identify whether a contact included more than one

patient. See Standard CM14: Group sessions

• ‘multidisciplinary contact’ – to identify whether the contact involved more

than one member of staff. See Standard CM9: Multidisciplinary meetings.

Feed 10: Medicines dispensed19

96. This feed contains details of drugs administered to a patient during their

treatment, including the actual drug cost. As such it is a valuable source of

patient information and matching it to the appropriate patient episode/contact

is vital.


• Standard CP4: Matching costed activities to patients

• Standard CM10: Pharmacy and medicines


row 11

Collection source

97. This data needs to be collected locally from the pharmacy system or a report

supplied by the pharmacy provider under contract, as there is no national

dataset for medicines prescribed.

98. Local information may be supplemented by the mandated devices and drugs

taxonomy and monthly dataset specifications for NHS England’s specialised

commissioning on high cost drugs, which covers approximately 70% of high

19

The feed numbers are used across all sectors. For a full list, please see Spreadsheet IR1.1. Integrated trusts can use the ‘likely sector’ filter to reveal the other feeds.



cost drugs nationally (including acute services). This may be useful for some

mental health organisations and integrated trusts.

99. The information relating to any locally commissioned high cost drugs may also

inform the medicines data feed.

100. A list of the data fields you need to include in this feed is given in Spreadsheet

IR1.2. Information collected through this feed will be matched to the APC and

NAPC feeds using the prescribed matching rules in Spreadsheet CP4.1.

Feed scope

101. This feed should allow matching of medicines dispensed and identified to an

individual patient during an admission or a NAPC contact, for accurate costing

within the costing period. Such medicines are likely to include controlled drugs

and high cost items, but possibly also regular and other medications.

102. For information on the matching of medicines to patients, see Standard CP4:

Matching costed activities to patients and Standard CM10: Pharmacy and

medicines.

103. The standard fields for matching are ‘organisation code (local patient identifier’

and ‘date of issue’.

104. Medicines issued to wards that are not identified to an individual patient may

also be included in this feed – for example, non-identifiable drugs or ‘ward

stock’ drugs. These should be allocated in accordance with a relevant

allocation method. Use activity ID: MDA065; activity: Dispense non patient-

identifiable drugs.

105. Medicines dispensed to locations other than wards should be included in the

feed, including NAPC contacts.

106. Fields used in the costing process are:

• ‘drug identification’ – the name of the drug dispensed (you should ensure

this field contains the medicine name, not the brand name). Having the

name of the medicine and not just its code will improve local reporting of

the PLICS and discussions with clinicians



• ‘total drug cost’ – this field contains the key information for patient-level

costing

• ‘drug quantity supplied (units)’ – this field will improve understanding of the

medicines included for local verification and reporting

• ‘location code’ – this field will improve local reporting and enable discussion

with the correct service area.

107. Note the ‘drug identification’ field may include both the medicine and the

quantity supplied, eg ‘risperidone 50 mg powder and solvent for suspension

for injection vials’.

108. The feed should contain the patient’s ‘NHS number’, to allow organisations

where patient-level medicines are provided by another NHS organisation to

match the medicines to the episode.

109. The ‘contracted out flag’ field is required in the medicines dispensed feed to

understand data completeness in local datasets. The field may need to be

derived from a relevant feed in your local system, eg ‘requesting care provider

code’.

110. Care professionals prescribe and dispense drugs in both APC and NAPC

settings, or may simply issue a prescription for the drug to be dispensed

elsewhere (FP10 prescriptions). The medicines dispensed feed should include

all:

• medicines dispensed to a patient on a provider site

• FP10 prescription costs recorded in the provider’s ledger.

111. FP10 prescription information gives useful information about the patient

pathway, so should be included. The costs of these prescriptions can be

treated in different ways:

• Where community or private pharmacies or the NHS Business Services

Authority – NHS Prescription Services (NHSPS) 20 – charge the provider for

the cost of FP10 prescriptions, the provider will have recorded this cost in

the general ledger. The organisation should obtain a dataset21 to

20

Formerly the Prescription Pricing Authority 21

The NHSPS is currently trialling a reporting model that allows for patient-level information.



understand which patient prescriptions these relate to, so the cost of the

drugs may be matched to the relevant patient contact as per Standard CP2:

Clearly identifiable costs, and activities as per Standard CM10 Pharmacy

and medicines. This dataset should be included in Feed 7: Medicines

dispensed as shown in Spreadsheet IR1.2.

• Where community or private pharmacies dispense FP10 drugs and charge

this directly to the clinical commissioning group (CCG), not the mental

health organisation, the cost will not be in the organisation’s general ledger

and there is no requirement to gather information on it.

112. Where pharmacy services and/or medicines are supplied by an acute provider

or a non-NHS party, and the cost is in your organisation’s general ledger, the

information received should comply with the fields needed for costing as

above. The NHS number will be required for patient-identifiable drugs, to allow

matching to the episode of care. Work with your pharmacy lead to ensure you

have access to this information.

113. Where the FP10 cost is in the general ledger, but the patient-level information

is not available, the cost should still be gathered into the resource and

allocated equally over all patients who used the service. Work with your

pharmacy lead and informatics department to get better access to patient-

level information.

114. Some medicines may only be provided to one cohort of patients. You should

work with your pharmacy team to find out if there are such cohorts; you can

then query any instances of cost data indicating such a medicine was issued

outside the expected cohort. For example, as melatonin is normally used in

child and adolescent mental health services (CAMHS),22 its issue to an adult

should be queried with the pharmacy or service team.

Feed 16: Improving access to psychological therapies (IAPT)23

115. The IAPT dataset has been recently developed to improve the information

available on assessment and treatment of adult patients with anxiety disorders

and depression. Some organisations also provide these services to older

adults and CAMHS.

22

Information provided by the NHS Improvement mental health lead pharmacist. 23




116. This feed should contain the non-admitted contacts for IAPT services that are

not recorded in the MHSDS dataset.

117. The fields available in IAPT – as shown in Spreadsheet IR1.2 – are not the

same as those in the MHSDS, so we are treating this as a separate master

feed. The costing processes should be the same as for NAPC.

118. This information makes costing more appropriate by adding the additional

contacts to the costed patient-level activity; these were previously ‘hidden’

activity (see below). This information is required for the PLICS collection.24

Relevant costing standard

• Standard CM3: Non-admitted patient care


row 7

Collection source

119. This data needs to be collected locally from the PAS or separate clinical

information system, as per the submission of IAPT data. Your informatics

team should be able to supply this dataset.

Feed scope

120. This data is a separate source of contact information from the MHSDS, as

IAPT contacts are not contained in the MHSDS. It contains the following fields:

• ‘organisation code (code of provider)’

• ‘service request identifier, appointment date’ and ‘appointment time’ – used

for the unique reference to the patient

• ‘appointment type’ – gives reporting information on the type of initial or

follow-up appointment

• ‘mental healthcare cluster code (final)’ – used for reporting the cluster

information at national level.

24

Further information on mapping for this feed will be available during implementation.



Additional patient-level activity feeds and fields

121. One purpose of the Healthcare costing standards for England is to help

organisations develop their costing processes in a practical and achievable

way. We encourage organisations to collect more patient-level activity data

wherever practical, taking into account the principle of materiality as stated in

the costing principles.

122. The patient-level activity feeds specified above are the minimum required for

costing but do not cover all the patient activities involved in providing mental

health services. You need to decide whether you require additional patient-

level feeds to meet specific costing needs. Examples of such feeds are:

• prison rehabilitation services

• offsite educational/mental health promotion

• crisis houses

• outreach services.

123. Future development areas should be prioritised according to three criteria:

• value of service

• volume of service

• priority of the service to the provider and the healthcare economy.

124. If your organisation already uses additional patient-level activity feeds in

costing, you should continue to do so. It is not the aim of the costing standards

to push a provider ‘backward’ in its costing journey, although it is important for

consistency that the areas covered by the standards are costed using the

prescribed methods. Record your additional feeds in your costing manual

(Worksheet 1.2: Additional information source).25

125. If you are not collecting and using the prescribed patient-level activity feeds in

your costing, you should work with your informatics department and the

department responsible for the data feed to introduce systems to collect the

information required to improve costing, and at the same time provide useful

information for patient care and business activities. Use the information gap

25

The prescribed feeds should be achieved in full before any additional non-standard feeds are developed.




analysis template to manage the identification, planning and action process

with your informatics colleagues. You should prioritise the prescribed feeds

over adding additional feeds.

126. Figure IR2.1 in Standard IR2: Management of information for costing gives

more detail on the information an organisation needs to collect.

Identifying hidden activity

127. Take care to identify any ‘hidden’ activity in your organisation. This is activity

that takes place but is not recorded on any main system such as the patient

administration system (PAS).

128. In some organisations, teams report only part of their activity on the main

system such as PAS, eg a department reports its APC activity on PAS but its

outreach activity on a separate clinical information system. Or a service team

records telephone calls with patients in a book, not electronically. Also,

provider mergers mean data is held in different systems. If any of these are

the case, work with your informatics department and the department

responsible for the data to obtain a feed containing 100% of the department’s

activity.

129. Capturing ‘hidden’ activity is important to ensure:

• any costs incurred for this ‘hidden’ activity are not incorrectly allocated to

recorded activity, inflating its reported cost

• costs incurred are allocated over all activity, not just activity reported on the

provider’s main system

• income received is allocated to the correct activities.

Contracted-in activity

130. If your organisation receives income for services delivered to another provider,

eg specialist art therapy, and this activity is included in your patient-level data,

the income received for it should not be used to offset costs. The activity

should be costed exactly as for own-patient activity but the costs should be

reported as ‘other activities’ and not matched to your organisation’s own

activity.




131. Use the contracted-in flag in column D of Spreadsheet IR1.2 to identify this

activity.

Other data considerations

132. Spreadsheet IR1.2 contains the required data fields for the patient information

feeds specified. These fields have various functions, such as costing,

matching collection or local reporting, as shown in columns L, M, N and P.

You may add fields for local purposes.

133. The activity feeds do not contain any income information. Your organisation

may decide to include the income for the feeds at patient level to enhance the

value of its reporting dashboard.26

134. The feeds do not include description fields.27 You may request that these are

included in the feeds; otherwise you will need to maintain code and

description look-up tables for each feed to understand the data supplied. You

will need a process to map and maintain a rolling programme for revalidating

the codes and descriptions with each service.

135. Locally generated specialty or service team codes may be used to allow

specialist activity to be reported internally at a more granular level than

treatment function code (TFC).

136. If local specialty codes are used, they should be included in the patient-level

feeds and in the costing process. The costs and income attributed to these

specialist areas need to be allocated correctly. You need to maintain a table

mapping the local specialty codes to the national TFCs. This needs to be

consistent with the information submitted nationally to ensure activity can be

reconciled.

137. Ideally, data feeds will come from the same PAS, but it is recognised that

some organisations may run different systems for different sites – including

where organisations have merged. Such different datasets should still contain

the same information required for national submissions, or should be

developed to attain this consistency. Therefore the feeds required for costing

purposes should also aim to provide the relevant data as described above.

26

See Standard CM4: The income ledger. 27

Refer to Spreadsheet IR1.1 for full details.



Proxy records

138. For areas with no patient-level activity, it may be possible to create proxy

records at patient level. These should conform to the same criteria as the

MHSDS, but remain clearly identifiable as proxy records. However, these

should be treated with caution and noted in your costing manual (Worksheet

15: Proxy records). They should also appear in the activity reconciliation – as

described in Standard CP5: Reconciliation – as the costed patient records will

not reconcile to the in-house activity count.

139. You should avoid generating proxy patient contact/attendance records in the

costing system to solve data quality issues in the main patient feeds. It is

better practice to work with your informatics department and service teams to

create the correct data entry on the ‘right first time’ principle. Creating proxy

records can lead to double counting of activity outputs – for example, when

someone later adds a missing record and it flows through to the costing

system, a second amount of cost will be picked up for the same activity.

140. However, proxy patient contact/attendance records can be created to provide

patient records to which to attach cost – for example, care provided outside

the organisation, or to provide anonymous costed records for services that

need to cost a patient not the patient – for example, some sexual health

services.

PLICS collection requirements

141. The master feeds of APC and NAPC form the basis of the cost collection. In

the mental health cost collection, APC costs must be aggregated to spell and

cluster code, and NAPC costs to contacts and cluster. IAPT will be collected

as a separate data feed for 2017/18. See Section 2 of the 2017/18 mental

health development PLICS cost collection guidance for more information.

https://improvement.nhs.uk/resources/approved-costing-guidance-collections/



30 | > IR2: Managing information for costing

IR2: Managing information for costing

Purpose: To assess the availability of the information specified in Standard IR1: Collecting information for costing purposes.

Objectives

1. To explain how to use information in costing.

2. To explain how to support your organisation in improving data quality in

information used for costing.

3. To explain how to manage data quality issues in information used for costing

in the short term.

4. To explain what to do when information is not available for costing.

Scope

5. All information required for the costing process.

6. This standard covers the technical aspects of managing the required

information, to help you use the costing methods.

Overview

7. Costing teams are not responsible for the quality and coverage of information:

that responsibility rests with your organisation. But you are ideally placed to

raise data quality issues within your organisation.



8. This standard focuses on the steps you can take to be confident about the

data used for costing and to support improvements in data quality in your

organisation.

9. It provides guidance on how you can mitigate the impact of poor quality

information when producing cost information. We consider these to be short-

term measures that allow you to produce reasonable cost information in line

with the costing principles while your organisation continues to work on the

quality and coverage of its information as a whole.

10. Your organisation should have its own governance arrangements for

managing data capture and flows, and for data quality. Information on this

process should be available from your chief information officer.

11. You may also find it useful to build a relationship with your organisation’s chief

clinical information officer, to ensure the activity data is understood and cost

(and income) data is used alongside the activity as part of the decision-making

toolkit.

12. Use the information gap analysis template and work with your informatics

colleagues and relevant services to assess data availability for costing, and to

streamline processes for extracting what is required.

13. Use the sources listed in Spreadsheet IR2.1 to inform discussions.

Availability of information for costing

14. Most of the required information28 should be held in your organisation’s

information systems, but availability will vary due to differences in how

information is managed and your IT capacity. Here we provide guidance on

assessing data availability.

15. Information availability for your organisation can be grouped as follows:

• available as part of national data collections – for the patient-level feeds

APC and NAPC, use national data collections from MHSDS and IPAT to

capture all or some of the data. Information relating to these national data

collections is given in Spreadsheet IR2.1

28

As specified in Standard IR1: Collecting information for costing purposes and the technical guidance.




• available in department-specific systems – you should obtain all or

some of the data from the informatics department or direct from the

department or specialty for these feeds, eg the medicines dispensed feed

• unavailable at patient level – depending on your organisation’s patient-

level data collection arrangements, data may not be available; for example,

if all areas of your organisation have yet to adopt the MHSDS. Note these

areas in the information gap analysis, and work with your informatics

department to make progress adoption of the MHSDS.

16. The quality of information varies among organisations but the information for

the APC and NAPC feeds should be available at all mental health

organisations. The medicines dispensed feed will only be available at

organisations that have either a pharmacy function or access to information

from the partner organisation that dispenses drugs for them. Supporting

contacts information may need a new system for recording the data.

17. Spreadsheet IR2.1 lists data sources in national collections that are relevant

to patient-level feeds.

18. You should work with your informatics department to perform a gap analysis

to see where you are meeting or exceeding the requirements, and where

information is missing or not yet available for costing. An information gap

analysis template is available for this.

19. Figure IR2.1 below is a flowchart showing you how to access data for costing.

20. You may be able to obtain feeds from your informatics team or directly from

the department. If these services are outsourced you need to obtain patient-

level information from the supplier.

21. Agree with informatics colleagues the format of information, frequency of

patient-level activity feeds and any specific data quality checks for costing.

Also work with your informatics colleagues and relevant services to streamline

processes for extracting the information required for costing.

22. Where patient demographic information is not available for governance or

confidentiality reasons, costs should still be allocated to a patient, not

necessarily the patient by following the costing process. The costing software

may require a proxy patient record and anonymous patient number to provide





a base for the costs to be attached to. In this case, the process for

managing/allocating these records should be recorded in your costing manual

(Worksheet 15: Proxy records).

Unavailable data

24. If your organisation does not collect information for auxiliary data feeds it will

not be available to the costing team – for example, if medicines are dispensed

by a local acute hospital or a private pharmacy.

24. Information for costing may be unavailable because:

• it is not collected at an individual patient level

• data is not given to the costing team

• data is not in a usable format for costing

• data is not loaded into the costing system and included in costing

processes.

Making data available

25. If you are missing any of the required data fields in Spreadsheet IR1.2, you

should follow the steps shown in Figure IR2.1 to make the data available for

costing.

26. Figure IR2.1 helps you identify why patient-level activity information may not

be available and the action you need to take to make it available.

27. Until the data becomes available, you will need to use an alternative costing

method to allocate costs, eg relative weight values.29

28. When patient-level activity data is unavailable, you need to continue to use

your current method as a work-around and log it in your costing manual

(Worksheet 1.4: Missing activity data). You should see this as an interim

method and start to collect all information specified in Standard IR1: Collecting

information for costing purposes to support accurate and consistent costing.

We recognise that organisations will need time to set up systems for the

collection of additional patient-level information for costing.

29

See Standard CP3: Appropriate cost allocation methods for further information on relative weight values.




• Costing principle 1: Good costing should be based on high quality data that

supports confidence in the results

• Costing principle 4: Good costing should involve transparent processes that

allow detailed analysis

• Spreadsheet IR2.1: Data sources available as part of national collection

• Spreadsheet IR2.2: Patient-level feeds log

• Costing manual template – showing how to record and monitor your

patient-level activity feed set up, progress and regular feeds.

Approach

Using information in costing

29. Costing is a continuous process, not a one-off exercise for a national

collection.

30. If your organisation has its own cost data for internal decision-making that is

available quarterly or monthly, you may only need to run the patient-level

costing process once a year for the national collections.

31. If your organisation has no other form of cost data, run our patient-level

costing process quarterly as a minimum; although we recommend running it

monthly as best practice.30

32. The benefits of frequent calculation of costs are:31

• effects of changes in practice or demand are seen and you can respond to

them while they are still relevant

• internal reporting remains up to date

• mistakes can be identified and rectified early.

33. A first cut of the patient-level activity feeds (APC and NAPC) from the PAS will

generally be available for costing by the fifth day of each month (referred to as

day 5 in Table IR2.1).

30

See The costing principles. 31

The benefits of real-time data can be found at: www.gov.uk/government/publications/nhs-e-procurement-strategy


http://www.gov.uk/government/publications/nhs-e-procurement-strategy

http://www.gov.uk/government/publications/nhs-e-procurement-strategy



Figure IR2.1: Making data available for costing

34. Some organisations will also have updates to this first feed – for example, by

the 20th day of each month (referred to as day 20 in Table IR2.1). You should

assess whether that update provides material changes to the data for costing;

if it does include the update in the costing process.

35. Depending on the costing software and by agreement with the informatics

team, you can either load these patient-level feeds into your costing system:

• the following month or

• to a locally agreed timetable in month.32

32

It may be best to update in month at the end of a target costing period – for example, when a national submission is due – as this will mean the costed information is as accurate as possible.



36. The update should add new records to, amend any existing records in and

remove any erroneous records from the PAS by data quality processes in

month. The method chosen should be documented in your costing manual

(Worksheet 2: Timing of activity feeds).

37. All other patient-level feeds should be submitted to the costing team according

to a locally agreed timetable each month so that the costing process can

begin promptly. You may need to be flexible about when some departments

provide their patient-level feed – but late submission should be the exception

rather than the rule. This should be agreed with the service and informatics

departments, and clearly documented to support good governance.

38. You should use the most complete information you have in the costing

process. This will mean that if your organisation reports monthly on patient-

level costing, you can meet your local reporting timetable, and appropriate

cost information will be available to support local decision-making.

39. You may find it useful to represent the agreed dates for the monthly cycle of

data receipts in a timeline diagram (see Figure IR2.2).

Figure IR2.2: Example timeline for when data should be available in the

monthly cycle

Note: In this example, some parts of the costing cycle may start at day 5 –

depending on the software used; some feeds are updated at a later date.

40. You should not delay starting the costing process waiting for late datasets to

arrive: many tasks can be accomplished even when data items are

outstanding. However, you should consider what the reasonable cut-off date is

for late data, to ensure most patient-level activity can be costed appropriately.

Day 5 : Patient-level APC/NAPC

data feeds available

Day 7: Medicines data feed received

Day 9: ECT suite data received

Final costing process begins



In-month or year-to-date feeds?

41. You should consider carefully the period for which data is loaded – in-month

or cumulative year-to-date, basing your decision on the approach and

frequency of the costing process and your organisation’s reporting

requirements. Loading data monthly is easier as the number of records is

much smaller.

42. It is important that the costing system is configured to recognise whether a

load is in-month or year-to-date; otherwise it may not load some of the activity.

43. To ensure the costing system is loading everything, you should follow the

guidance in Standard CP5: Reconciliation (paragraphs 10 to 12) and use the

patient event activity reconciliation reports as described in Spreadsheet

CP5.2.1. This will allow you to check the number of patient records in the feed

against the number of lines loaded into the costing system.

Descriptions and codes used in the feeds

44. Databases use the descriptions and codes provided when they were set up.

Over time these descriptions and codes may change, become obsolete or be

added to. For example, feed A may record a specialty as psychology and feed

B as clinical psychology; if these are the same department, this needs to be

identified and recorded in a mapping table, so they are not treated as separate

things in the costing process.

Logging patient-level activity feeds

45. Use Spreadsheet IR2.2 to keep a log of patient-level activity feeds. Table

IR2.1 below shows an example log of patient-level feeds.

Refreshing information used for costing

46. Note the difference between a refresh and a year-to-date feed. A year-to-date

feed is an accumulation of in-month reports (unless the informatics team has

specified otherwise). A refresh is a rerun of queries or reports by the

providing department to pick up any late inputs. The refreshed dataset

includes all the original data records whether amended or not, plus late

entries.



47. You need to refresh the data because services will continue to record activity

on systems after the official closing dates. For the best costing information,

the late data still needs to be costed. The refreshed information picks up these

late entries, which may be numerous.

48. Get a refresh of all the patient-level activity from the relevant department/team

or the informatics department to an agreed timetable. For example, the

informatics department can build PLICS feeds from the MHSDS it prepares for

submission to NHS Digital. This will ensure that nationally available data

matches the activity information costed locally.

49. A challenge for costing teams is that changes caused by the refreshes can

alter the comparative figures in service-line reports. With the help of the

relevant service’s management accountant leads, you need to explain

significant changes to users of the service-line reports, highlighting the impact

of late inputs to the department providing the patient-level activity feed.

Information used in the costing system for calculations

50. You need to specify in the costing system whether or not values in the patient-

level feeds can be used in calculations. If inconsistent measures are used

across the records – for example, if the medicine feed’s quantity column

records number of tablets, number of boxes or millilitres dispensed in different

records – the costing system will need to ignore these quantities in the feed.

51. If the costing system uses information from a feed to calculate durations – for

example, length of stay in hours – it will need to know which columns to use in

the calculation. If the durations have already been calculated and included in

the feed, the costing system will need to know which column to use in

allocating costs.

52. Some medicines dispensed patient-level feeds (Feed 10) include the cost.

The standards call this a traceable cost. You will need to instruct the costing

system to use this cost as a relative weight value or actual cost in the costing

process.33

33

See Standard CP3: Appropriate cost allocation methods for more details on relative value units.


Table IR2.1: Example of a patient-level feeds log

Feed number

Feeds In-month/ year-to-date

Data source

Department Named person/ deputy

Format Time period

Working day data received

Number of records received

1 Admitted patient care – day 5

In-month PAS informatics department

Informatics XXX/XXX CSV In-month activity

5 XXX

1 Admitted patient care – day 20



20 XXX

2 Non-admitted patient care – day 5



5 XXX

2 Non-admitted patient care – day 20



20 XXX

10 Medicines dispensed

In-month XXX Pharmacy XXX/XXX CSV In-month activity

5 XXX



53. Once you decide the calculation method, keep a record for each patient feed.

Table IR2.2 shows an example of a log recording important details of the

patient-level activity feeds. The template for this log is included in

Spreadsheet IR2.3.

Table IR2.2: Log showing how the costing system uses patient-level activity feeds

Feeds Detail Column to use in costing

1 Admitted patient care 1 line = 1 discrete stay on a specific ward

Duration of stay in hours

2 Non-admitted patient care 1 line = 1 attendance Duration in minutes

3 Medicines dispensed 1 line = 1 issue Total drug cost

Supporting your organisation in improving data quality for costing and managing data quality issues in the short term

Data quality checks for information to be used in costing

54. You need to quality check information that is to be used for costing by

following a three-step process:

1. Review the source data: identify any deficiencies in the feed, including

file format, incomplete data, missing values, incorrect values, insufficient

detail, inconsistent values, outliers and duplicates.

2. Cleanse the source data: remedy/fix the identified deficiencies. Take

care when cleansing data to follow consistent rules and log your

alterations. Create a ‘before’ and ‘after’ copy of the data feed. Applying

the duration caps (see below) is part of this step. Always report data

quality issues to the department supplying the source data so they can

be addressed for future processes. Keep data amendments to the

minimum, only making them when fully justified and documenting them

clearly.



3. Validate the source data: you need a system that checks the cleansed

and correct data is suitable for loading into the costing system. This may

be part of the costing system itself. Check that the cleansing measures

have resolved or minimised the data quality issues identified in step 1; if

they have not, either repeat step 2 or request higher quality data from the

informatics team.

55. Consider automating the quality check to reduce human errors and varied

formats. Automatic validation – either via an ETL (extract, transform, load)

function of the costing software or a self-built process – can save time. But

take care that the process tolerates differences in input data and if it does not,

that this data is consistent. Without this precaution you risk spending

disproportionate time fixing the automation.

56. Your organisation should continuously improve data quality for audit purposes.

Request changes from the source team/department or informatics team, then

review the revised data for areas to improve. Set up a formal process to guide

these data quality improvement measures and ensure those most useful to

costing are prioritised. Figure IR2.3 shows the process.

Use of duration caps

57. A duration cap rounds outlier values up or down to bring them within accepted

perimeters. Review the feeds to decide where to apply duration caps and build

them into the costing system.

58. You can apply a cap to reduce outliers, eg an appointment/contact in a NAPC

setting that has not been closed. Applying duration caps removes the

distraction of unreasonable unit costs when sharing costing information.

59. Capped data needs to be reported as part of the data quality check. The caps

need to be clinically appropriate and signed off by the relevant service.

60. While caps moderate or even remove outlier values, studying these outliers (ie

unexpected deviations) is informative from a quality assurance point of view.

You should record the caps used and work with the informatics department

and the department responsible for the data feed to improve the data quality

and reduce the need for duration caps over time.



Figure IR2.3: Establishing data quality improvement measures

61. Table IR2.3 shows examples of duration caps that should be used as a default

in the absence of better local assumptions.

Table IR2.3: Examples of duration caps

Feed number

Feed name Duration in minutes

Replace with (minutes)

2 Non-admitted patient care ≤4 5

2 Non-admitted patient care >180 180

1 Admitted patient care ≤4 5



Recalled items on patient-level activity feeds

62. Take care with patient-level activity feeds in case they contain negative values

due to products being returned to the department – for example, the medicines

dispensed feed containing both the dispensations and the returned drugs for a

patient.34 These dispensations and returns are not always netted off within the

department’s database, so both the dispensations and the returns will appear

in the feed. If this is the case, you need to net off the quantities and costs to

ensure only what is used is costed.

34

For further guidance on ensuring the quality of the medicines dispensed feed, see Standard CM10: Pharmacy and medicines.

Mental health costing processes

44 | > Costing processes

Costing processes

CP1: Role of the general ledger in costing

CP2: Clearly identifiable costs

CP3: Appropriate cost allocation methods

CP4: Matching costed activities to patients

CP5: Reconciliation

CP6: Assurance of costing data (new for 2017/18)


45 | > CP1: Role of the general ledger in costing

CP1: Role of the general ledger in costing

Purpose: To set out how the general ledger is used for costing, and to highlight the areas which require review to support accurate costing.

Objective

1. To ensure the correct quantum of cost is available for costing.

Scope

2. This standard should be applied to all lines of the general ledger.

Overview

3. You need the income and expenditure for costing. We refer to this as the

‘general ledger output’. This output needs to be at cost centre and expense35

code level, and is a snapshot of the general ledger. You do not require

balance sheet items for costing.

4. You must include all expenditure and income in the general ledger output,

which must reconcile with the financial position reported by your board and in

the final audited accounts.

5. The general ledger is closed down at the end of the period, after which it

cannot be revised.36 For example, if in March you discover an error in the

previous January’s ledger that needs to be corrected, you can only make the

correction in March’s ledger. Doing so will correct the year-to-date position,

even though the January and March figures do not represent the true cost at

35

Expense codes may also be called ‘account codes’ or ‘subjective codes’ in your general ledger. 36

Some systems may allow you to back post payroll journals; and other changes may be made during the external audit process.



those times, as one will be overstated and the other understated. Check with

the finance team to ensure any such changes are brought into the PLICS.

6. The timing of when some costs are reported in the general ledger may pose a

challenge for costing. For example, overtime pay for a particular month may

be posted in the general ledger in the month it was paid, not the month the

overtime was worked. This highlights a limitation in the time-reporting and

expense payment system. We recognise this limitation, but are not currently

proposing a work-around for it.

7. Discuss the general ledger’s layout and structure with the finance team so that

you understand it. This will help you understand the composition of the costing

output.


• Costing principle 2: Good costing should include all costs for an

organisation and produce reliable and comparable results37

• Spreadsheet CP1.1: General ledger output required fields

Approach

Obtaining the general ledger output

8. The finance team should tell you when the general ledger has been closed for

the period and give you details of any off-ledger adjustments for the period.

You need to put these adjustments into your cost ledger, especially if they are

included in your organisation’s report of its financial position, as you will need

to reconcile to this.

9. Keep a record of all these adjustments in the costing manual (Worksheet 7.3:

Log of adjustments to the general ledger at each load), to reconcile back to

the general ledger output. Take care to ensure that any manual adjustments

are mapped to the correct line in the cost ledger.

10. See Spreadsheet CP1.1 for what the extract of the general ledger output must

include.

37

See The costing principles. These are applicable to all sectors.




11. Ensure the process for extracting the general ledger output is documented in

your costing manual (Worksheet 6: Process to extract general ledger output).

You should extract this once the finance team has told you it has closed the

general ledger for the period.

12. The finance team should tell you when it has set up new cost centres and

expense codes in the general ledger, and when there are material movements

in costs or income between expense codes or cost centres. One way to do

this is by a general ledger changes form that is circulated to all the appropriate

teams including costing. Cross-team approval increases the different teams’

understanding of how any changes affect them.

13. Finance should not rename, merge or use existing cost centres for something

else without informing you as this causes problems. Finance teams should

close a cost centre and set up a new one rather than renaming it.

14. The new general ledger cost centres and expense codes need to be mapped

to the cost ledger. You then need to reflect these changes in the costing

system.

15. ‘Dump’38 ledger codes need to be addressed so that all costs can be assigned

to patients accurately. Work with your finance colleagues to determine what

these ‘dump’ codes contain so they are mapped to the correct lines in the cost

ledger.

16. You should have a rolling programme in place to regularly meet with your

finance colleagues to review the general ledger and its role in costing. This

identifies problems and enhances their engagement with the use of the data.

38

Various terms can be used across different organisations for dump ledger codes. For example, they can also be referred to as error suspense codes and holding ledger codes.


48 | > CP2: Clearly identifiable costs

CP2: Clearly identifiable costs

Purpose: To ensure costs are in the correct starting position for costing.

Objectives

1. To ensure all costs are in the correct starting position and correctly labelled for

the costing process.

2. To ensure the same costs are mapped to the same resources.

3. To ensure all costs are classified in a consistent way.

4. To ensure income is not netted off against costs.

Scope

5. This standard should be applied to all lines of the general ledger.

Overview

6. The general ledger is set up to meet the provider’s financial management

needs rather than those of costing. Therefore some costs included in it will

have to be transferred to other ledger codes, or aggregated or disaggregated

in the cost ledger to ensure the costs are in the right starting position for

costing.

7. Feedback from those who use the national cost datasets is that the

inconsistency in how costs are labelled limits meaningful analysis.

8. To ensure the accuracy of cost data, the costs at the beginning of the process

need to be in the right place with the right label.



9. This is one of the reasons we have introduced our standardised cost ledger,

which is a guide for mapping expenses to cost ledger categorisations. This is

shown in Spreadsheet CP2.1. This facilitates an in-depth investigation of the

general ledger to understand the costs contained in it; and provides a

mechanism to get the costs into the right starting position with the right label.

This is important so the correct cost allocation method can be applied to the

cost, and the process can be audited effectively.

10. The standardised cost ledger covers all sectors, to enable integrated providers

to work from one document. You can use column N – ‘Likely sector’ – in

Spreadsheet CP2.1 to suggest rows that are relevant, and set up your own

customised list in column O – ‘My organisation’.39

Classification of costs

11. The standardised cost ledger classifies costs at both the cost centre and

expense code level –combining the two into the ‘costing account code’ level

(see Figure CP2.1 below).

Figure CP2.1: The costing account code

12. The costing account code identifies whether the costs contained there are

patient facing or support:40

• Patient-facing costs are those that relate directly to delivering patient care

and are driven by patient activity. They should have a clear activity-based

allocation method, and may include both pay and non-pay costs. These

39

Note PLICS collection resources are not included for ‘acute’ in the Healthcare costing standards for England – mental health. If you require further information, please contact the NHS Improvement costing team at [email protected]

40 See column C in Spreadsheet CP2.1 for how cost centres and costing account codes are

classified.

Cost centre

Expense code

Costing account

code




costs sit in their own costing account code in the cost ledger and use

resources and activities in the costing process.

• Support costs do not directly relate to delivering patient care. Many relate

to running the organisation (eg board costs, HR, finance, estates). Other

support costs may be at service level, such as ward clerks and service

management costs.

13. To help the costing process, support costs have been classified as type 1 and

type 2 to clearly delineate the type of activity that drives them:

• Type 1 support costs are support costs that have no direct relationship to

patient care, eg finance and HR costs.41

• Type 2 support costs have some relationship to patient care activity

volumes. For example, interpreting costs will vary in relation to the patient

activity. Type 2 support costs are allocated to the patient using an activity-

based method. These costs sit in their own costing account code in the cost

ledger and use resources and activities in the costing process.

14. The nature of the cost determines the classification, not the allocation method.

At times the standards apply patient-facing or type 2 cost allocation methods

to a type 1 cost as this is believed to be a more accurate way to allocate out

this cost.

15. Some providers may have sophisticated data systems allowing them to

allocate a type 1 support cost using an activity-based method, but this does

not change the classification of this cost to patient-facing or type 2 support.

16. For national reporting, all providers are expected to use the national PLICS

terminology. However, we understand there are other cost classifications that

providers use for local reporting purposes. The standards do not provide

guidance on these classification types.

Income

17. To maintain transparency in the costing process, income should not be netted

off from the costs. The only exceptions to this rule are:

41

Traditionally, this type of cost is known as ‘overheads’, ‘corporate overheads’ ‘true overheads’ or similar.



a. Income received for clinical excellence awards can be netted off the

consultant’s salary cost.

b. Where 100% of an individual care professional’s costs are reported in

the provider’s general ledger but they spend part (or all) of their time with

patients at another provider.42 For example, a psychiatrist provides a

liaison service at an acute hospital and this is part of the acute hospital

activity. Your organisation will normally invoice another organisation for

this. The income received for this activity at another provider can be

netted off the care professional’s pay costs to avoid inflating the cost per

minute of the provider’s own-patient activity. It is important to determine

whether the recharged value includes overhead recovery, as netting this

additional overhead income off staff costs would understate the

remaining resource cost.

c. Where the materiality principle applies – so for very small value contracts

or service-level agreements there is no need to determine the associated

costs.

Salary recharges

18. These are described as ‘pay recharge to’ and ‘pay recharge from’ in the

standardised cost ledger. Pay recharges can be classified as either clinical or

non-clinical in the cost ledger.

19. In line with paragraph 17b above, a ‘pay recharge to’ is where you invoice

another trust for an element of someone’s salary, without including any

service element for support costs or surplus (this may be included in the gross

recharge). This needs to be netted off against their actual salary so that 100%

of cost is not allocated to, for example, 50% of activity. The ‘pay recharge to’

needs to be moved to the cost ledger line for the individual and netted off;

whether non-clinical or clinical.

20. The ‘pay charge from’ needs to move to the cost centre that is paying for the

activity so the pay costs can be allocated to the activity.

42

Some NHS organisations call these arrangements ‘operating partnership agreements’.



Commercial activities

21. Activities where there are costs and income, such as providing staff meals,

should be reported in line with Standard CP5: Reconciliation and Standard

CM8: Other activities under the ‘other activities’ cost group. This is so that a

provider’s income generating activities do not inflate or deflate the cost of

own-patient care.

22. Where income is generated but the associated costs are difficult to identify,

such as car parking, you will need to make a sensible assumption about the

costs involved after discussion with the appropriate teams. Report the costs

and income under ‘other activities’.

Expenditure and activity recorded in different organisations

23. Where your organisation holds the expenditure budget but does not record the

activity, the costs should be reported under the ‘reconciliation items’ cost

group.

24. If your organisation is taking part in a national pilot or other such scheme,

where activity is recorded but all expenditure is provided by the project, you

should treat this activity as ‘other activities’ and report it under the ‘other

activities’ cost group until (or if) the pilot becomes business as usual.



organisation and produce reliable and comparable results

• Costing principle 3: Good costing should show the relationship between

activities and resources consumed

• Costing principle 4: Good costing should involve transparent processes that

allow detailed analysis


• Spreadsheet CP2.1: Standardised cost ledger (with mapping to resources)

• Spreadsheet CP2.2: Type 1 support costs allocation methods



Approach

25. Before proceeding, review the spreadsheet costing diagram. This is a high

level visual aid to the costing process described in these steps.

26. We describe the process in steps to help you understand it. In reality these

steps may happen simultaneously in the costing system.

27. The initial setting up of your PLICS is a one-off exercise, but the interface

between your general ledger set up and the standardised cost ledger should

be understood and reviewed regularly to keep it up to date. This regular

process will also allow you to refine and improve the PLICS over time.

28. There will be various software solutions to deliver the costing process. We are

not prescribing the software solutions.

Setting up the costing process in your costing system

29. The costing process described in the standards has been designed to be

linear in approach, with each element mapping to the next in a standardised

and consistent way, as shown in Figure CP2.2.

30. There are three elements:

• analysing your general ledger and understanding how costs need to be

disaggregated to ensure they are costed properly, or where they need to

move to, to ensure they have the right label and are in the right starting

position

• using the information from this analysis to inform the processing rules in

your costing system

• having the prepopulated cost ledger in your costing system, so when you

load your general ledger output, it uses the information informing the

processing rules to move costs to the right line in the cost ledger.

Figure CP2.2: Mapping the costing process components



31. Mapping from the general ledger to the cost ledger is achieved by following

step 0 described below.

32. The mapping of each costing account code from the cost ledger to the

resources43 that indicate the prescribed cost allocation method to use is

provided for you in columns I to K in Spreadsheet CP2.1; and mapping from

these resources to the collections resources44 is provided for you in columns L

and M in Spreadsheet CP2.1.45

33. To help you identify where to prioritise analysis, use our cost ledger auto-

mapper application. This will analyse the naming conventions in your general

ledger based on expense codes and identify an appropriate line in the

standardised cost ledger.46

34. The cost ledger, resources and collections resources – with their coding

structure and the mapping between these elements – will be prepopulated in

your costing system. If these mappings change we will provide the information

to update your costing system.

35. However depending on what costing system you use,47 costing may take

place at a lower level than the resources shown in column B of Spreadsheet

CP3.1. Your system may use cost items, local resources or another

classification or grouping of costs. You can continue using this method in your

costing system, but be aware that it adds an additional mapping exercise to

your set up.

36. The cost allocation methods prescribed in the technical document take into

account that costing may happen at a lower level than the resource

description.

43

Resources are what the provider purchases to help deliver the service. A resource may be a care provider, equipment or a consumable.

44 ‘Collection resources’ is the group of resources used for the national submission. These resources

are not the same as the resources used in the costing process. 45

We appreciate that in this version of the standards additional cost centre mappings may need to be added to Spreadsheet CP2.1. We will review and update the technical document during the implementation process where appropriate. Please send suggestions for additional cost centres to [email protected]

46 The general ledger to cost ledger auto-mapper application is available as part of the early

implementer support package. If you have not volunteered to be an early implementer, the application is available on request from [email protected]

47 Or the work you have already performed for previous or local costing exercises,



37. In Figure CP2.2 above the only mapping exercise you need to undertake is

mapping your general ledger to the cost ledger as described in step 0 below.

38. If you use additional mappings you will need to do two mapping processes. If

you use a local resource in your costing process, you will need to map your

cost ledger to your local resource, then your local resource to the resource

that prescribes the allocation method. Figure CP2.3 below describes the

mapping costing process with the additional component of a local resource.

39. The mapping process will still need to be linear to maintain standardisation

and consistency. You must document your mapping assumptions in your

costing manual (Worksheet 10.2: Local resource mapping).

Figure CP2.3: Mapping the costing process components with the inclusion of a local resource

40. Do not treat these mapping exercises as separate entities. It is important to

ensure everyone is putting the same costs in the same place, to maintain the

linear mapping.

41. Figure CP2.4 is an example of how not to approach the mapping exercises.

Figure CP2.4: How not to map to the costing process elements



The costing process

Step 0: Analyse your general ledger to get your costs in the right starting position with the right label48

42. For the cost data to be credible we need to ensure everyone is putting the

same costs in the same place before the costing process begins.

43. To achieve this, before the costing process can start, you need to ensure all

the costs recorded in the general ledger are in the right starting position and

have the right label.

Step 0.1: Map the general ledger to the cost ledger using the standardised cost ledger algorithm

44. Use the standardised cost ledger columns A to F in Spreadsheet CP2.1 to

ensure all your costs are in the right starting position and have the right label

for the costing process.

45. Use the information from your in-depth investigation of your general ledger to

inform the processing rules in your costing system. Your organisation may use

sub-analysis codes that give a finer separation of costs. Understand these

codes and use them if available to ensure your general ledger to cost ledger

mapping is informed by them.

46. You will not be able to analyse each line of the general ledger in depth the first

time you do this exercise, but over time – with good communication between

you and your finance colleagues – this can be refined, starting with where the

largest values are involved.

47. Columns I and J in the standardised cost ledger contain the mapping to the

resources that, with the prescribed activity, identifies the prescribed cost

allocation to use. This means that everyone will treat the same cost in the

same way, so that variation in activity costs will not be due to variations in the

costing process.

48. Mapping from the standardised cost ledger in your costing system to the

resources ensures that everyone classifies the same costs in the same way.

48

This is step 0 as it is not part of the monthly costing process.



This means that when you compare activity costs you are comparing ‘apples

with apples’.

49. To help prioritise your analysis, use our cost ledger auto-mapper application49.

This will analyse your general ledger’s naming conventions for expense codes

and identify an appropriate line in the standardised cost ledger Spreadsheet

CP2.1 to map to.

50. Where the cost ledger auto-mapper application algorithm (or the standardised

cost ledger spreadsheet shown in full in Spreadsheet CP2.1) cannot identify

an appropriate line in the cost ledger, you will need to analyse the general

ledger line, identify what cost sits there and map it to the appropriate line in

the cost ledger

51. Analysis of your general ledger will help you understand how costs are

recorded in it and what steps you need to take to get the costs in the right

starting position with the right label. This will include disaggregating costs that

need to be mapped as different resources, or where the labels on the general

ledger do not correspond to the costs recorded on that line in the general

ledger.

Step 0.2: Disaggregation of necessary general ledger codes

52. Figure CP2.5 shows an example of the disaggregation you may need to do to.

You may have a therapies cost centre in your general ledger and on an

expense line called ‘band 6’ you may have occupational therapists and art

therapists. The costs for the occupational therapists and the art therapists

need to go to different resources, so must be disaggregated. You can use

relative weight values50 to determine the apportionment of costs between the

two appropriate lines in the standardised cost ledger.

49

The general ledger to cost ledger auto-mapper application is available as part of the early implementer support package. If you have not volunteered to be an early implementer, the application is available on request from [email protected]

50 See Standard CP3: Cost allocations for more detail on relative weight values.



Figure CP2.5: Example of disaggregation between the general ledger and the cost ledger

53. Although this mapping process is largely a one-off exercise, you need a rolling

programme for analysing your general ledger over time to ensure that costs in

the cost ledger continue to be in the right starting position with the right label.

Review all mapping regularly, at least annually, to ensure all changes or

additions to the general ledger are understood and included in the cost ledger.

Step 1: Load your general ledger output into your costing system

54. The general ledger output must be transformed into the cost ledger within the

costing system to ensure that any changes can be traced and reconciled to

the provider’s general ledger.51

55. The cost ledger template should be prepopulated in your costing system. This

means that when you load your general ledger input into your costing system

in step 1, it will use the information from your analysis of the general ledger in

step 0 to move those costs against the appropriate line in the cost ledger.

51

If you are attempting to adopt the standards before purchasing a compliant software product, please ensure that your process for mapping is robust, transparent and documented. All PLICS costing software used in NHS organisations should comply with the minimum software requirements.

https://improvement.nhs.uk/resources/minimum-software-requirements/

https://improvement.nhs.uk/resources/minimum-software-requirements/



56. This means you will have the right costs in the right starting position

with the right label ready for the costing process to begin.

Step 2.1: Allocating support costs

57. Once the PLICS has received your general ledger output, it can process the

data to allocate type 1 support costs to the patient-facing costs and type 2

support costs, as well as to any other type 1 support costs that have used

them (eg finance using HR and vice versa). The methods used are illustrated

in Figure CP2.6.

58. All52 type 1 support costs have been mapped to an allocation method in

Spreadsheet CP2.2.

Figure CP2.6: Extract from the spreadsheet costing diagram in the technical document showing step 2.1: Allocating support costs

Cost

ledger

Patient- facing

cost centres

Support

costs

Type 1 support

cost centres

Type 2 support

cost centres

Support cost centre

Line 1: SC type 2

Line 2: SC type 2

...

Patient-facing cost centre

Line 1: PF

Line 2: PF

...

Cost allocation

methods

Cost allocation

methods

General

ledgerReciprocal

allocation

process

52

In this version of the standards, we appreciate that additional support cost mappings may need to be added to Spreadsheets CP2.1 and CP2.2. We will review and update the technical document during the implementation process where appropriate. Please send suggestions for additional cost centres to [email protected]



Centrally held and devolved type 1 support costs

59. It is important to identify whether a type 1 support cost is centrally held or has

already been devolved to the relevant cost centres in the cost ledger. For

example, are the computer hardware costs for clinical areas

• held in a ‘central’ place in your general ledger or

• purchased to a central code, but then recharged monthly to the service that

used them (devolved) or

• in the ward budgets to begin with (devolved)?

60. This is because the standards describe allocating type 1 support costs as a

two-step process of:

1. apportioning type 1 support costs to other cost centres that use them

2. getting those type1 support costs in the right place in the cost centre that

uses them, to be assigned to patient-facing or support resources for the

costing process to start.

61. The standards describe it this way to make the costing process transparent.

62. To help with this, column G in Spreadsheet CP2.1 states whether a cost is

centrally held or is a devolved type 1 support cost in the cost ledger.

63. The cost allocation methods prescribed for centrally held type 1 support costs

(identified with a C in column G in Spreadsheet CP2.1) are given in step 1 in

column G in Spreadsheet CP2.2.

64. If the type 1 support cost has already been devolved in the cost ledger

(identified with a D in column G in Spreadsheet CP2.1), you do not need

to do step 1 in Spreadsheet CP2.2 and can move directly to step 2.

Examples of type 1 support costs devolved to the cost centres that use them

65. Some type 1 support costs will already be reported in patient-facing cost

centres such as ward clerks on a ward on a ward. Therefore these costs do

not need to be moved.

66. Other type 1 supports costs – such as security in a high secure ward – may

have already been devolved in the general ledger, based on an internal



recharge in the general ledger. There is no need to repeat this step, providing

the prescribed costing allocation method has been used.

67. Type 2 support costs, such as interpreting, should sit in their own cost centres

in the standardised cost ledger, as these have specific activity-driven

allocation methods specified in columns F and G in Spreadsheet CP3.3.

68. If you are using a type 2 support cost allocation method (that is, an activity-

based method) to allocate out a cost we have classified as a type 1, continue

to do this and document it in your costing manual (Worksheet 11: Superior

costing methods). We have adopted this scenario as a superior method in

Spreadsheet CP3.5.

Reciprocal costing

69. This step includes the reallocation of type 1 support costs between each

other. You should do this using a reciprocal allocation method, which allows

all corporate support service costs to be allocated to, and received from, other

corporate support services.

70. Reciprocal costing must take place within the costing system.

71. Type 1 support costs should not be allocated using a hierarchical method as

this only allows cost to be allocated in one direction between corporate

support services.53

72. A reciprocal allocation method accurately reflects the interactions between

supporting departments and therefore provides more accurate results than a

hierarchical approach.

Step 2.2: Apportioning type 1 support costs in patient-facing and type 2 support cost centres

73. Within the costing system, you should apportion type 1 support costs over the

patient-facing and support cost type 2 expense lines within the cost centre,

based on the allocation methods in column E in Spreadsheet CP2.2 (see

Figure CP2.7 below).

53

Providers using this method of allocation should adopt the reciprocal method as soon as possible. This can be done in conjunction with purchase or review of current costing software.



Figure CP2.7: Extract from the spreadsheet costing diagram in the technical document showing step 2.2

ResourcesPatient-facing cost centre

After SC type 1 moved in

Support cost centre

After SC type 1 moved in

Support cost centre

Line 1: SC type 2

Line 2: SC type 2

...

Patient-facing cost centre

Line 1: PF

Line 2: PF

...Patient- facing resource

Support resource

LIne1: SC type 2

LIne2: SC type 2

LIne3: SC type 1

Cost allocation

methods

LIne1: PF

LIne2: PF

LIne3: SC type 1

Cost allocation

methods

74. At this point, patient-facing costs and type 2 supports costs, with their

allocated portion of type 1 support costs, are mapped to resources. Table

CP2.1 describes a high level example of this:

Table CP2.1: Example of costs within a patient facing resource

Resource name

Patient-facing cost

Type 1 support cost

Total resource cost for the costing process

CMHT nurse X Y XY

Psychiatry consultant (community service)

XX Y XXY

How to treat type 1 support costs in type 2 support cost centres

75. All type 1 support costs in type 2 cost centres have been mapped to the type 2

support cost allocation method and should use the prescribed allocation

method in column G of Spreadsheet CP2.2.54

54

The instruction in column G refers you to the relevant type 2 support cost allocation method in Spreadsheet CP3.4.



76. This is because type 2 support cost centres all map to the same resource and

use the same allocation method.

77. Taking an extra step to allocate type 1 costs over the type 2 expense lines will

not produce a different result, so is unnecessary.

78. However, we must stress that the information in Table CP2.1 will still need to

be available if you allocate type 1 support costs in type 2 support cost centres

straight to the support cost resource.

How to treat type 1 support costs in patient-facing cost centres

79. You do not need to allocate type 1 support costs over the patient-facing

expense lines if:

• all the lines in the patient-facing map to the same resource and

• you are using an average cost per minute to allocate that resource.

80. Taking an extra step to allocate type 1 costs over the patient-facing expense

lines will not produce a different result, so is unnecessary.

81. The prescribed allocation methods to allocate type 1 support costs to patient-

facing cost centres and straight to the patient-facing resource are given in

column H of Spreadsheet 2.2.

82. However, we must stress that the information in Table CP2.1 will still need to

be available if you allocate type 1 support costs to patient-facing cost centres

and straight to the patient facing resource.

83. Where the standards state you should allocate the actual staffing costs

to their named activity for consultant medical staffing, you will need to

allocate the type 1 support costs over the patient-facing expense lines.

Otherwise individual staff members will not get their correct amount of

type 1 support costs.

84. If the lines in the patient-facing cost centre are mapped to different

resources, you will need to allocate the type 1 support costs over the

individual expense lines. Otherwise the different resources will not get

their correct amount of type 1 support costs.



85. To do this, use the prescribed allocation methods in column I of Spreadsheet

CP2.2.

Things to consider when following this method

86. Under an expenditure-based allocation method, some areas of the ledger may

get a larger proportion of the allocated type 1 support costs because of

specific high-cost items, such as drugs. If so, investigate the type 1 support

cost allocation and use a more appropriate one.

Negative costs in the cost ledger

87. Negative costs arise for various reasons, such as a journal moving more cost

than is actually in the expense code. You should include all costs, including

negative costs, in the costing process to enable a full reconciliation to the

organisation’s accounts.

88. With the wider finance team, you need to consider the materiality of each cost

centre’s negative costs and expense code combination. If the negative value

is sufficiently material, you may want to treat it as a reconciliation item,

depending on the materiality and timing of the negative costs. The main

questions to ask before deciding are:

• What negative costs are there?

• Are they distorting the real costs of providing a service?

• Are they material?

• Do they relate to commercial activities?55

89. You need to investigate with the wider finance team why negative cost

balances have arisen. Several issues can cause negative values in the

general ledger to be carried into the cost ledger. We describe these below,

with suggested solutions.

• Miscoding: Actual expenditure and accruals costs are not matched to the

same cost centre and expense code combination. Ideally, the responsible

finance team rectifies such anomalies to give the costing team a clean

55

If yes, then the negative value may be a ‘profit’ element to the service provided. This profit should be treated as a reconciliation item.



general ledger output; if not, you should make these adjustments in the cost

ledger.

• Value of journal exceeds value in the cost centre: If the value

transferred from the cost centre exceeds the value in the cost centre, this

will create a negative cost. Again ideally, the responsible finance team

rectifies such anomalies but if not, you should make these adjustments in

the cost ledger.

• Timing of accrual release: An inaccurate accrual release can result in a

negative cost value. When this happens, you must consider whether the

negative cost is material and whether its timing creates an issue. You may

need to report some negative costs caused by timing issues as a

reconciliation item.

90. Where the accrual is posted in the last month of the financial year and

released in the first month of the current year, this can result in an

overstatement in the previous year and understatement in the current year. To

resolve this, you may need to report the net over-accrual as a reconciliation

item to avoid understating the current-year costs. The same is true with an

equivalent misstatement for income.

91. Negative costs can be an issue because of traceable costs.56 If a particular

cost per patient or unit is known and allocated to an activity rather than used

as a relative weight value, and the total of the actual cost multiplied by the

number of activities is greater than the cost sitting in the costing accounting

code, it will create a negative cost.

92. Traceable costs should be used as a relative weight value. The only exception

is where the traceable cost is of a material value and using the actual cost as

a relative weight value will distort the final patient unit cost. If you do use the

actual cost you must ensure by doing this you do create a negative value in

the cost ledger.’

93. Negative costs may also be found in the cost ledger if, during the required

ledger movements, more cost is moved than is actually in the expense code.

To avoid this, you should use relative weight values or percentages to move

costs rather than actual values. For example, 50% of the pay costs rather than

a fixed amount. 56

For more information on traceable costs see Standard CP3: Appropriate cost allocation methods.



94. Costs need to be shown in your local reporting dashboard in a way that allows

departments that provide clinical support services such as therapies and

services such as forensic services to see their own costs. Services need to

see all costs incurred in treating their patients, while clinical support services

need to see all costs incurred in delivering their care or support at a service

level. This information at service level is crucial as it allows clinical support

services to identify which services are their biggest consumers. Changes to

demand within services will affect the activity of clinical support services and

affect costs.

Advanced costing methods

95. Advanced allocation methods: If you are using a type 2 support cost

allocation method (that is, an activity-based method) to allocate a cost we

have classified as type 1, continue to do this and document it in your costing

manual (Worksheet 11: Superior costing methods). We have adopted this as a

superior method in Spreadsheet CP3.5.

96. Acuity/intensity: The allocation methods prescribed in this version of the

standards, in most cases, do not include a weighting for acuity or intensity. If

you are using a weighting for acuity or intensity with the prescribed allocation

method, continue to do this and record it in your costing manual (Worksheet

11: Superior costing methods). If you are not, you may wish to develop this

over time (subject to materiality principles). We have adopted this as a

superior method in Spreadsheet CP3.5.

Review of data after Step 2

97. At the end of the process for apportioning costs to patient-facing resources,

these resources will include both patient-facing and type 1 support costs, and

may also show some type 2 support costs. These resources are now ready to

be moved to patient level.

Identifying expected costs for high cost drugs or outsourced activity

98. Some drug costs – particularly those of newly released drugs or drugs in

clinical trials – may be significant but not yet identified at patient level in the

medicines feed. Costs for such drugs may skew the cost of some patient

groups, or be included within support costs.



99. Work with the pharmacy or other relevant service team to understand where

such drug costs sit in the general ledger and if necessary, move material

values to an appropriate place to ensure the cost sits in the correct resource.

100. Outsourced activity – for example, capacity provided by a private mental

health hospital – can sit in the ledger where it appears to be a support cost.

Ensure such expected costs are understood and allocated to the correct

patient resource.

Audit of costing processes

101. It is essential to ensure the costing system reconciles at this stage; otherwise

further steps will not reconcile and may prove more complex to unravel. Refer

to Standard CP5: Reconciliation and Standard CP6: Assurance of costing

processes.

Note on clusters

102. The costing process is unaffected by how patients are classified into clusters.

The costing standards do not include guidance on how to do this or relate it to

costing.


Netting off other operating income

103. For the national cost collection, other operating income must be netted off

from the patient care costs. This includes education and training and research

income. Non-patient care costs must be allocated to patient care activity using

the standardised allocation methods or appropriate local allocation rules. We

are also collecting the costs for non-patient care activities as a memorandum

item in the reference cost workbook, to inform future decisions on the

treatment of non-patient care costs in the national collection. See the 2017/18

mental health development PLICS cost collection guidance for more

information.

Support costs

104. Type 1 and type 2 supports costs for the PLICS cost collection must be

mapped to the support cost collection resource and reported in the patient

https://improvement.nhs.uk/resources/approved-costing-guidance-collections/https:/improvement.nhs.uk/resources/approved-costing-guidance-collections/




level extract. See Spreadsheet CP2.1 for the collection resource mapping. If

you have any questions, contact [email protected]



69 | > CP3: Appropriate cost allocation methods

CP3: Appropriate cost allocation methods

Purpose: To ensure that the correct quantum of costs is allocated to the correct activity using the most appropriate costing allocation method.

Objective

1. To ensure resources are allocated to activities using a single appropriate

method, ensuring consistency and comparability in collecting and reporting

cost information, and minimising subjectivity.

2. To ensure costs are allocated to activities using an appropriate information

source.

3. To ensure resources are allocated to activities in a way that reflects how care

is delivered to the patient.

4. To ensure relative weight values reflect how costs are incurred.

Scope

5. All costs reported in the cost ledger and all activities undertaken by the

organisation.

6. This standard covers relative weight values and how to identify and use

traceable costs in the organisation.

Overview

7. The standardised costing process using resources and activities aims to

capture cost information by reflecting how those costs are incurred.



8. The costing process allocates resources to patients in two steps:

1. allocate resources to activities (explained in this standard)

2. match costed activities to the correct patient episode, attendance and

contact (explained in Standard CP4: Matching costed activities).

9. The allocation methods prescribed in the standards in most cases do not

include a relative weight value for acuity or intensity. If you are using a relative

weight value for acuity or intensity with the prescribed allocation method,

continue to do this and record it in your costing manual (Worksheet 11:

Superior costing methods).





• Costing principle 6: Good costing should be consistent across services,

enabling cost comparison within and across organisations

• Spreadsheet CP3.1: Resources for patient-facing and type 2 support costs

• Spreadsheet CP3.2: Activities for patient-facing and type 2 support costs

• Spreadsheet CP3.3: Methods to allocate patient-facing resources, first to

activities and then to patients

• Spreadsheet CP3.4: Allocation methods to allocate type 2 support

resources, first to activities and then to patients

• Spreadsheet CP3.5: Superior costing methods

• Spreadsheet CP3.8: Ward round data specification

Approach

Resources

10. Resources are what the provider purchases to help deliver the service. A

resource may be a care professional, equipment or a consumable.

11. The costs within a resource may have different information sources and cost

drivers. For example, the patient-facing CMHT nurse resource could include



the costs of nurses’ salaries and also support type 1 costs such as CMHT

service administrator costs, CMHT non-pay costs, HR and finance costs.

12. You should review the rows in Spreadsheet CP3.1 and type 2 support costs,

and identify which resources are relevant to your organisation. You can use

column G – ‘Likely sector’ – in Spreadsheet CP3.1 to suggest rows that are

relevant, and set up your own customised list in column H – ‘My organisation’.

13. The transparency of these costs – what they are and where they come from in

the general ledger – should be maintained throughout the costing process.

14. Once these separated costs have been calculated they can be aggregated to

whatever level the resources have been set at, and you can be confident the

resource unit cost is accurate because it is underpinned by this costing

process.

15. Column B in Spreadsheet CP3.1 lists the prescribed patient-facing and

support type 2 resources to be used for the costing process.

16. Column D in Spreadsheet CP3.1 classifies resources as either patient-facing

or support type 2.

17. Column J in Spreadsheet CP2.1 contains the mapping from each line in the

cost ledger to the patient-facing and support type 2 resources. Use this

information to identify the two-step prescribed allocation methods in

Spreadsheets 3.3 and 3.4.

Activities

18. Activities are the work undertaken by resources (including staff) to deliver the

services required by patients to achieve desired outcomes: for example, a

therapy session carried out in clinic by a community psychiatric nurse or a

CPA meeting with the patient and multiple staff members.

19. Together, resources and activities form a two-dimensional view of the costs

incurred to deliver specific activities. This can be displayed in a matrix such as

that shown in Table CP3.1.



Table CP3.1: Example of a resource activity matrix for two patient contacts

Resources

Activities

Outpatient care CPA meetings

Consultant mental health X

Neuropsychologist X

Cognitive behavioural therapist X

Psychologist X

Community psychiatric nurse X X

Occupational therapist X X

20. Activities are classified either as patient-facing or type 2 support activities.

21. You need to identify all the activities your organisation performs from the

prescribed list of patient-facing and support type 2 activities in column B in

Spreadsheet CP3.2. You can use column J – ‘Likely sector’ – in Spreadsheet

CP3.2 to suggest rows that are relevant, and set up your own customised list

in column K – ‘My organisation’.

22. Some activities are informed by patient-level feeds: for example, the activity

‘Dispense all other medicine scripts’ uses information from the medicines

patient-level feed for costing.

23. Some activities use other information sources for costing: for example, the

activity ‘CNST indemnity’ requires the CNST schedule to allocate the

resources correctly.



Allocating resources to activities

Figure CP3.1: Extract from the spreadsheet costing diagram in the technical document showing allocation of resources to activities

Resources Activities

Patient- facing resource

Support resource

Cost allocation methods


Patient-facing activity

Support activity

24. Only costs that have an activity-based cost allocation method are assigned a

resource and activity in the prescribed lists of resources and activities.

25. You need to use these prescribed resource and activity combinations in the

costing system.

26. You can ignore the resource and activity combinations for activities that your

organisation does not provide. You can use columns I and F – ‘Likely sector’

in Spreadsheets CP3.3 and CP3.4 respectively to suggest rows that are

relevant, and columns J and G – ‘My organisation’ to set up your own

customised list.

27. You must allocate your patient facing resources to the patient-facing activities

using the methods in column F in Spreadsheet CP3.3.

28. You must allocate your type 2 support resources to the type 2 support

activities using the methods in column D in Spreadsheet CP3.4.

29. Resources need to be allocated to activities in the correct proportion. There

are three ways to do this:



• based on actual time or costs57 from the relevant feed

• using relative weight values created in partnership with the relevant

departments or

• using a local information source.

30. Where resources need to be apportioned to a number of activities, you need

to determine what percentage of the cost to apportion after discussions with

relevant clinicians and managers, supported by documented evidence where

available (eg medical job plans). These splits and their basis should be

recorded in your costing manual (Worksheet 8.2: % allocation splits).

31. As an example, a division for medical staffing costs is shown in Figure CP3.2.

One way to do this is to disaggregate the cost ledger further to

resource/activity level. Figure CP3.2 shows how this could look in the

resource/activity matrix.

Figure CP3.2: Identifying the correct quantum of resources to apportion to activities

57

The costs should be used as a relative weight value rather than a fixed cost.



Table CP3.2: Example of a resource and activity matrix for a consultant using the information in Figure CP3.2

Activity

Resource

Consultant

Ward round XX

Supporting contacts

XX

CPA meetings

XX

Outpatient care

XX

32. Do not apportion costs equally to all activities without clear evidence that they

are used in this way, and do not apportion costs indiscriminately to activities.

33. Use a relative weight value unless there is a local reason for applying a fixed

cost.

34. Where the same cost driver is used for several calculations in the costing

system, and providing that the costs can be disaggregated after calculation,

you can aggregate the calculations in your costing system to reduce

calculation time. For example, if numerous costs on a ward use the driver

‘length of stay’, you can add them together for the cost calculation.

35. If you have a more sophisticated cost allocation method for allocating patient-

facing or support type 2 resources to their activities:

• keep using it

• document it in your costing manual (Worksheet 11: Superior costing

methods)

• tell us about it.

36. For allocation methods we have adopted as superior methods, see

Spreadsheet CP3.5.58

58

This list is based on the implementation experiences in the acute sector. We would like to hear about your superior methods.



37. Some superior methods will require a subset of resources.59 For example, the

Standard CM1: Medical staff superior method of allocating actual payroll detail

for non-consultant medical staff will need a resource below the standard level

of resources.60 There is no requirement currently to adopt this method, but if

you are already performing such detailed work, continue to do so and log it in

your costing manual (Worksheet 11: Superior costing methods).

38. We will not accept some cost allocation methods as superior to the prescribed

methods. These include using income or national averages to weight costs or

allocating costs equally to activities.

39. The patient-level feeds will inform the costing methods by providing key cost

drivers such as length of stay. The patient-level feeds will also provide

information for relative weight values to be used in the costing process, such

as drug costs in the medicines dispensed feed.

40. Investigate any costs not driven to an activity, or any activities that have not

received a cost, and correct this.

Traceable costs (patient-specific costs)

41. Where actual costs61 of items are known, use these in the costing process as

a relative weight value62 to allocate them to the activities (see Table CP3.3).

42. Items for which a traceable cost may be available include:

• drugs, including high-cost drugs

• security – patient-specific cost of escorting using an external provider

• blood tests – where an admitted patient’s blood sample is sent to another

provider for further investigation

• outsourced care at a private inpatient facility

• agency or external provider specialing and specialist care.

59

See Standard CP2: Clearly identifiable costs – including Figure CP2.3: Mapping the costing process components with the inclusion of a local resource.

60 This method will be discussed with the technical focus group that includes software suppliers for

the costing standards – mental health version 3. 61

These actual unit costs are known as traceable costs. 62

If an actual cost is applied, it is likely that costs will be over or under-recovered in the costing system, so actual traceable costs should be used as a relative weight value to allocate the costs.



Table CP3.3: Using traceable costs as a relative weight value

Number of staff at a facility

Expected cost

Expected spend

Actual spend

Weighted spend ([expected spend/total expected spend] × actual spend)

Escort staff A

5 1,000 5,000 ? 4,091

Escort staff B

12 500 6,000 ? 4,909

Total 11,000 9,000 9,000

43. If the value of the item is material to the cost of the patient and you want to

use the actual cost, you must ensure the value matches the ledger cost. If

there is under or over-recovery you must use the cost as a weighting, as

outlined above.

44. Some departments may have local databases that record material cost

components against the individual patients who incurred them: for example,

an assessment by a specialist from another organisation. These values can

be used in the costing process as a relative weight value to allocate the costs.

Relative weight values

45. Relative weight values are values or statistics used to allocate costs to a

patient event in proportion to the total cost incurred.

46. One way to store the relative weight values for use in your costing system is to

use statistic allocation tables.

47. Income values and national cost averages should not be used as relative

weight values.

48. Relative weight values are used to allocate costs when other drivers are not

available or appropriate. You need to develop and agree them with the

relevant service managers and care professionals to ascertain all aspects of

the costs involved and ensure these are as accurate as possible.



49. Different costs will require different approaches to derive appropriate relative

weight values to support their allocation to patients. For example, a group

therapy session may require relative weight values for:

• lead care professional time per session

• therapist time per session by band.

50. You should allocate all costs to patients based on actual usage or

consumption. In exceptional circumstances where you cannot do this, you

should use a relative weight value to allocate costs to a patient.

51. Where time is the actual usage measure, the time relates to patient-facing

time, and does not include preparation/follow-up time or travel time.

52. The approach should not be high level – for example, it should not be the

average time to carry out an observation or therapy session. Instead, the

measure should be tailored to the particular activity. To do this you need to

break down the activity into its component costs and measure the drivers of

these individual costs.63

53. Relative weight values should be reviewed on a rolling programme or when a

significant change occurs in the relevant department.

54. When developing relative weight values the materiality principle should inform

where you concentrate efforts to make the biggest improvements to your

costing.64

Care professional support of inpatient units

55. Although the APC feed contains information on the length of stay of patients

on a ward/facility, it does not contain the length of time a care professional

spends on ward rounds or the number of ward rounds undertaken.

56. A relative weight value is required to cost whether the care professional:

63

We appreciate that some areas may not have defined and collected their activity types in this way. Work with the information you have and recommend development of improved activity recording over time, as this type of data can benefit understanding of patient care as well as the costing process.

64 We are developing a costing assessment tool specifically for mental health costing. This will allow

you to understand where work will bring the greatest benefit to the quality of your costing.



• does more than one ward round a day

• spends more time with one cohort of patients than with others during ward

rounds due to the complexity of their condition or care programme.

57. Use the template in Spreadsheet CP3.8 to obtain the information required

about ward rounds.

58. We recommend you start by identifying care professionals who care for

patients with varying needs, to ascertain if their ward rounds are longer for

particular cohorts of patients.

59. There is no need to calculate a relative weight value for ward rounds or care

professional services to inpatients that do not meet either of the criteria listed

above.

60. Some care professionals may want to refine the calculation of relative weight

values further, eg by focusing on the costs for a particular patient cohort to

identify the benefit to outcomes. Work with clinicians to derive relative weight

values that ensure the costing is accepted by them.

Support costs

61. To allocate support type 1 costs in the correct proportion, relative weight

values may need to be identified by obtaining the relevant information from the

departments.

62. An example of a statistic allocation table for the relative weight values for

budgeted staff headcount in whole time equivalents is given in Table CP3.4.

63. You may add additional information to weight a relative weight value even

further. For example, you may add cleaning rotas or location weightings to

floor area for cleaning, so the ECT suite or clinical areas receive a greater

proportion of cleaning costs than corridors. If you do this, continue to do it and

document it in your costing manual (Worksheet 10.2: Local resource

mapping).



Table CP3.4: Whole time equivalent table for relative weight values

Department WTE

High-secure ward 15

General ward 25

Therapy rooms 20

Clinic reception 2

Psychiatric intensive care unit

30

Finance office 8

Total 100


Resources

64. Spreadsheet CP2.1 contains mappings from the standardised ledger codes to

the collection resources. This outlines costs that are out of scope for

collection. Spreadsheet CP3.1 contains a mapping from allocation resource to

collection resource. Some allocation resources map to multiple collection

resources; this is because we have included a department resource in the

cost collection for therapies, diagnostics, pathology and pharmacy costs. All

other service costs in the ledger must not map to the department resources.

Validations will be built into the collection to check resource and activity

combinations in the collection this year.

Activities

65. Allocation activities are mapped to collection activities in Spreadsheet CP3.2

in the technical guidance. Some allocation activities are out of scope for the

PLICS collection; these costs will either be reported in the reference cost

workbook or in the cost reconciliation. Review Spreadsheet CP3.2 with

Sections 7, 19 and 20 from the 2017/18 mental health development PLICS

cost collection guidance for all excluded services and costs from PLICS.




81 | > CP4: Matching costed activities to patients

CP4: Matching costed activities to patients

Purpose: To achieve consistency across organisations in assigning costed activities to the correct patient episode, attendance or contact.

Objective

1. To ensure the prescribed matching rules are used for consistency.

2. To assign costed activities to the correct patient episode,65 attendance or

contact.

3. To highlight and report source data quality issues that hinder accurate

matching.

Scope

4. This standard should be applied to all costed activities.66

5. The auxiliary data feeds, including the ‘medicines dispensed’ feed, need to be

matched to your master data feed. So if you have any of the auxiliary data

feeds listed in Spreadsheet IR1.1 – for example, the medicines feed to be

matched to the APC care feed or NAPC feed – this standard is relevant. If you

have any additional auxiliary data feeds67, they must also comply.

65

Note: traditionally, the mental health sector did not use the term ‘episode’ for an inpatient stay.

The MHMDS does now use this term, so it or inpatient stay is used throughout the Healthcare costing standards for England – mental health. In reporting terms, episodes can be aggregated up to spells or other measures.

66 Standard IR1.1: Collecting information for costing purposes identifies which patient-level activities are to be part of the matching process.

67 Some mental health organisations use a separate ward stay dataset which is matched as an

auxiliary feed. If your organisation does, please continue to do so, and record it in your costing manual (Worksheet 1.2: Additional information source). There is more detail around matching



Overview

6. Matching is integral to accurate patient-level costing.68 For an accurate final

patient unit cost, the costed activities need to be matched to the patient

episode, attendance or contact in which they occurred.

7. The costing process matches costed activities to patients in two steps:

1. allocate resources to activities (explained in Standard CP3: Appropriate

cost allocation methods)

2. match costed activities to the correct patient episode, attendance and

contact (explained in this standard).

8. The costing process uses two approaches to match costed activities to

patients:

• for activities informed by a patient-level feed, use the prescribed matching

rules

• for all other activities, use the prescribed cost allocation methods to match

the costed activities to the patient.

9. The prescribed matching rules ensure the relevant auxiliary data feeds can be

attached to the correct patient episode, attendance and contact.

10. Matching rules need to be hierarchical and strict enough to maximise

matching accuracy, but not so strict that any matching is impossible. Matching

rules that are too lax risk ‘false-positive’ matches occurring – that is, activity is

matched to the wrong patient episode, attendance or contact.

11. The matching hierarchy in the prescribed matching rules dictates which

master PAS datasets the auxiliary feed is matched against, and in what order.

12. Where a data feed contains the patient’s point of delivery (POD) or location,

and the data field is considered robust, use this to determine which core PAS

rules for ward stay datasets in the Healthcare costing standards for England – acute. We will review these for their appropriateness to mental health providers for future versions of the Healthcare costing standards for England – mental health.

68 For mental health providers, staff costs constitute a major proportion of overall costs. However, to

make patient-level cost data more reliable, it is important to track and match other comparatively less material costs back to patients as well.



patient dataset to match against. For example, if a patient event is classed as

a non-admitted patient contact in the data feed, this patient’s activity is first

matched against the master NAPC dataset. If the data in this field is

considered robust, records should only be matched to the NAPC dataset to

avoid the risk of ‘false-positive’ matches.

13. As data feeds have different matching patterns associated with their activities,

each has a distinct set of matching rules. Matching rules may differ in their

hierarchies, date parameters or additional data fields used in the matching

criteria.

14. The rules are designed to match iteratively by using the strictest matching

rules first and then relaxing these if a match is not achieved. These rules are

designed to achieve a balance between the number of false positives being

matched and the number of records remaining unmatched.

15. The accuracy of matching costed activities using the prescribed matching

rules depends on the quality of both the master feeds and the auxiliary feeds.

Follow the guidance in Standard IR2: Managing information for costing to

support your organisation in improving data quality.


• Spreadsheet CP3.3: Methods to allocate patient-facing resources, first to

activities and then to patients

• Spreadsheet CP3.4: Allocation methods to allocate type 2 support

resources, first to activities and then to patients

• Spreadsheet CP4.1: Matching rules



Approach

Figure CP4.1: Excerpt from the spreadsheet costing diagram showing matching costed activities to patients

Activities

patients

Matching rules


Patient-facing activity

Support activity

Cost allocation rules

Using the prescribed matching rules

16. The episode/attendance/contact ID always generates the best match as

this is unique to the patient and the relevant date range.69 In the MHSDS, this

is:

• admitted patient care (APC feed):

a. ‘local patient identifier (extended)’

b. ‘start date (care professional admitted care episode)’

c. ‘end date (care professional admitted care episode)’

• non-admitted patient care (NAPC feed):

d. ‘care contact identifier’

e. ‘care contact date’.70

69

If there is more than one contact on one day, the ID should also include this, whereas a simple aggregation of patient identifier and date will only reflect one contact on one day.

70 In some organisations the care contact identifier will include the care contact date. If this is the

case in your organisation, you do not need to add the care contact date twice.



17. If your auxiliary data feeds (eg medicines dispensed feed71) are obtained from

the PAS, and you can include the episode or attendance ID in the feeds, use

this to match to the master feeds.

18. If your auxiliary feeds do not include the episode/attendance/contact ID, use

the prescribed matching rules in Spreadsheet CP4.1.

19. If your matching rules are more sophisticated than the prescribed matching

rules and improve the accuracy of your matching, continue to use them and

record them in your costing manual (Worksheet 3.1: Superior matching).

20. Activities from the non-integrated systems need to be matched to the following

groups of patients:

• patients discharged during the costing period (APC feed)

• patients not discharged and still in a bed at midnight on the last day of the

costing period (APC feed)

• non-admitted patient care (NAPC feed).

21. Some activities from non-integrated systems should not be matched. For

example:

• drugs dispensed from pharmacy for a patient whose episode is already

closed

• drugs issued by pharmacy but sent to another organisation without a

patient contact72 even if the patient is under a care plan with your

organisation

• drugs dispensed from pharmacy to patients who did not attend (DNA) or for

children/vulnerable adults were not brought (WNB).

22. For this reason there are no prescribed matching rules for the NAPC feed

relating to DNA/WNB.

71

We understand that some mental health organisations use the ‘ward stay’ data as a separate auxiliary feed. We are currently considering adding this to the information requirements.

72 For more guidance on how to cost patient-specific drugs, see Standard CM10: Pharmacy and

medicines.



Matching hierarchy used in the prescribed matching rules

23. All the feeds with prescribed matching rules in Spreadsheet CP4.1 follow the

hierarchy:

1. APC

2. NAPC.

The hierarchy is adjusted slightly for each feed to reflect how the service is

provided

24. In addition to this hierarchy, there are additional searches up to 720 hours

either side of the delivery dates to increase the chances of a match.

25. You must search 24 hours before and after the exact date, expanding

consecutively up to 720 hours. For example:

• 24 hours before, 24 hours after

• 48 hours before, 48 hours after.

26. You must search APC 24 hours before, then NAPC 24 hours before, then

APC 24 hours after, then NAPC 24 hours after, expanding consecutively up to

720 hours. For example:

• 24 hours before APC

• 24 hours before NAPC

• 24 after hours APC

• 24 hours after NAPC

• 48 hours before APC

• 48 hours before NAPC

• 48 hours after APC

• 48 hours after NAPC.

27. There are also conditional criteria contained in the prescribed matching rules.

28. The prescribed matching rules then search again without the conditional

criteria.



29. The mental health auxiliary feeds in Standard IR1: Collecting information for

costing should be matched in the order given in Spreadsheet IR1.1. If you

have (or develop) other auxiliary feeds, these should be matched after the

mandated fields.73

Using the prescribed cost allocation methods

30. For patient-facing activities not informed by a patient-level feed, use the

prescribed cost allocation methods in column F in Spreadsheet CP3.3 to first

allocate patient-facing resources to activities, and then use column G to match

the costed activities to patients.

31. For support type 2 activities not informed by a patient-level feed, use the

prescribed cost allocation methods in column D in Spreadsheet CP3.4 to

allocate type 2 support resources first to activities and then to patients.

Figure CP4.2: Allocating costs if patient activity information is unavailable

73 We are looking to include examples of best practice additional auxiliary feeds. Please let us know

if you have these.

Do you have information available that can help you

with allocating costs to patients?

If yes, allocate costs to activity following guidance provided in Standards CP2

and CP3

If no

Step 1: Speak to the team providing care to work out how costs can be allocated

to patients in absence of activity data

Step 2: Develop relative weight values in

collaboration with the providing team (eg

pharmacy) to allocate costs to the receiving teams (eg

CMHT). These costs should be reported as reconciliation

items

Step 3: If the receiving teams (eg CMHT) cannot be identified, report the costs by

providing team (eg pharmacy) as a

reconciliation item



Other considerations

32. Some costed activities will inevitably not match because either the activity

took place too long before the episode/attendance, or the quality of the

information in the activity feed is so poor that an appropriate match cannot be

found.

33. Develop a list of ‘unlikely matches’ to be included in the matching rules for

your organisation to ensure that costs for some activities are not assigned to

episodes incorrectly. For example, as the drug melatonin is normally

prescribed to children, you should query its assignment to an adult patient,

even if other matching criteria are fulfilled. Engagement with clinicians, the

pharmacy team and other staff will help you identify these ‘unlikely matches’.74

34. Your costing system should produce a report of the matching criteria used in

your system as described in report CP5.1.8 in Spreadsheet CP5.1. You

should have a rolling programme to review this.

35. Review is necessary because costed activities may be being matched on the

least stringent criteria, and work is needed to improve data quality so that

activity can be matched more accurately. You should have a rolling

programme to review this.

Reporting unmatched activity for local business intelligence

36. Organisations have traditionally treated the cost of this unmatched activity in

different ways. Most commonly, it was absorbed by matched activity, which

could have a material impact on the cost of matched activity, particularly when

reviewing the cost at an individual patient level for comparison with peers and

tariff calculation.

37. For local reporting purposes we recommend you do not assign unmatched

activity to other patient episodes, attendances or contacts.

38. To achieve consistent and comparable costing outputs, unmatched activity

should be treated consistently across organisations. We suggest applying

these rules for any unmatched activity:

74

You will need to work with your costing software supplier to ensure regular reporting of these items is possible, and have a process in place to audit/amend any erroneous matches.



• If the service that ordered the item can be identified but the item cannot be

matched to a patient episode, attendance or contact, the cost sits in the

service under unmatched items. It should not be matched to the other

patients within that service.

• If the service that ordered the item cannot be identified, the cost sits in the

providing department under unmatched items. Likewise, the cost should not

be matched to the patients within the estimated specialty. For example, if a

drug issue cannot be matched to a patient episode, attendance, contact, or

known other POD, the unmatched activity should be reported under the

pharmacy service line as this is the department that provided the service.

This data should be discussed with the pharmacy department to improve

understanding or improve data quality in the feed.

39. If reported unmatched activity forms a material proportion of an organisation’s

expenditure, this is likely to be due to poor source data. As this issue will

deflate the patient unit cost, it is important to identify it and improve the

quality of the source data, rather than artificially inflating the patient unit cost

by allocating unmatched activity.75 Please follow the guidance in Standard

IR2: Managing information for costing to support your organisation in

improving its data quality.

40. Follow the steps identified in Figure IR2.1 in Standard IR2: Managing

information for costing to make new auxiliary data feeds available for costing.

You will need to work with your informatics team to make information available

that can be used for matching. Guidance on how costs should be allocated to

patients is provided in Standard CP3: Appropriate cost allocation methods.

41. Your costing system should produce a report showing all unmatched activity

as described in Spreadsheet CP5.1 and you should have a rolling programme

to review this.

42. Tables CP4.1 and CP4.2 below show how unmatched activity could be

reported to assist business intelligence.

75

See paragraphs 18 to 34 in Standard CM2: Incomplete patient events for guidance on matching auxiliary feeds to incomplete patient events and how to treat events that occur in a different costing year.



Table CP4.1: Example of unmatched activity within a service

Service: CAMHS South Team Total activity

Total resource cost

Inpatient care – core episodes XX

Drugs issued to CAMHS XX

Outpatient care XX

Education and training XX

Unmatched activity identified as CAMHS but unable to match to individual patients

XX

Total XXX

Table CP4.2: Example of unmatched activity within a providing department

Department: Pharmacy Total activity

Total resource cost

CAMHS XX

Adult acute service XX

Older persons secure unit XX

Adult outpatients XX

Unmatched activity unable to be allocated to a specialty or patient

XX

Total XXX

PLICS cost collection requirements

46. For the PLICS collection, costs should be aggregated at spell and care

contact level.

47. Unmatched cost should not be reported separately. All unmatched costs

should be allocated to patient spells and care contacts using matched activity.

Unmatched activity should be excluded from allocation methods so costs are



allocated to matched activity only, with the exception of the activities from the

non-integrated systems outlined above. You need to be able to flag

unmatched activity and cost in your costing system to complete the costing

assessment tool.


92 | > CP5: Reconciliation

CP5: Reconciliation

Purpose: Process for reconciling costs and income to the organisation’s accounts and to reconcile the activity counts reported by the organisation.

Objectives

1. To ensure the cost and income outputs from the costing system reconcile to

the organisation’s accounts.

2. To ensure the activity outputs from the costing system reconcile to what the

organisation is reporting.

Scope

3. This standard covers all costs, income and activity included in the costing

process.

Overview

4. All outputs of the costing process must reconcile to the information reported to

the board and in the final audited accounts. This ensures a clear link between

these outputs and the costs and activity information captured in the source

data.




• Costing principle 4: Good costing should involve transparent processes

that allow detailed analysis

• Spreadsheet CP5.1: Cost and income reconciliation reports

• Spreadsheet CP5.2: Activity reconciliation reports



Approach

Reconciliation of costs and income

5. The costs and income outputs must reconcile to the main sources of this

information, with the general ledger output and the organisation’s reported

financial postion.76

6. To demonstrate that the outputs of the costing process reconcile to the main

sources of information, use the cost and income reconciliation reports detailed

in Spreadsheet CP5.1.

7. To support reconciliation and reporting, once the costing model is fully

processed the costs associated with patients and other cost groups should be

classified into the five cost groups listed in Table CP5.1.

8. Where your organisation is commissioned to provide an activity, but this

activity occurs outside it and is recorded by an external body, you should

obtain this information and include it with your organisation’s costing data. If

you cannot obtain the activity data, report the cost in reconciliation items.

9. Cost and activity reconciliation items have these benefits:

• patient unit costs reflect the true cost of treatment, undistorted by provider-

incurred costs that are not patient-related

• the true cost is more appropriate for benchmarking between providers as

non patient-related costs could significantly affect cost reporting in different

organisations.

76

See Standard CP2: Clearly identifiable costs for guidance on where adjustments may be made between the general ledger output and the cost ledger, to be included in your reconciliation.



Table CP5.1: Cost groups

Cost group Description

Own-patient care Costs relating to the organisation’s own-patient activity including:

• incomplete patient events.

• MDT meetings

• contracted-out services (such as capacity purchased from

private inpatient organisations)

• private patients, overseas visitors, non-NHS patients and

patients funded by the Ministry of Defence.

Education and training (E&T)

Costs relating to E&T at the organisation.

Research and development (R&D)

Costs relating to R&D in the organisation.

Other activities Includes the costs related to the organisation’s:

• commercial activities, such as pharmacy services for

another provider

• direct access services,77 where the patient is referred from

primary or community care for assessment only but the care

remains with the GP/community organisation

• local authority care

• voluntary and other third-party sector services

• national programmes.

Cost and activity reconciliation items

Includes where there is activity for which there are no

corresponding costs.

Includes costs for which there is no corresponding activity, such

as in these circumstances:

• grants or donations received

• a provider has an agreement to provide resources to an

external body with no responsibility for delivering that

service to a commissioner, eg a provider-to-provider

service-level agreement – including national programmes

77

We are looking for examples where mental health services provide diagnostic services directly to primary care. Please include these in your feedback on the consultation.



Cost group Description

with funding outside the standard contracts with

commissioners

• a staff member such as a youth worker is employed by a

provider for activity undertaken by the local council and that

the provider is unable to include in the costing system.

Reconciliation of activity

10. The activity outputs must reconcile to what your organisation reports. For

example, if it reports XX contacts in NAPC in any costing period, your activity

costing outputs should reconcile to this. To avoid reconciliation differences

due to timing, we emphasise that patient-level feeds used in the costing

process and those reported by the organisation are created at the same

time.78

11. To demonstrate that the outputs of the costing system reconcile to the main

sources of activity information, the activity reconciliation reports detailed in

Spreadsheet CP5.2 must be available from the costing system.

12. You should also reconcile the activity outputs to the activity in the source

datasets to ensure all the activity you entered into your costing system has

been costed and then included in the costing output.

Proxy records

13. If possible, you should avoid generating proxy patient contact/attendance

records within the costing system to solve data quality issues in the main

patient feeds. It is better practice to work with your informatics department and

service teams to create the correct data entry on the ‘right first time’ principle –

see Standard IR1: Collecting information for costing. Creating proxy records

can lead to double counting of activity outputs: for example, when someone

later adds a missing record and it flows through to the costing system, a

second amount of cost will be picked up for the same activity. However, if you

78

Departments often continue to input data into the feeder system after the official end date. It is helpful if the costing professionals understand any changes to the activity data after the point the costing activity dataset was run, as they may be asked questions about why the current data showing in organisation dashboards does not reconcile to costing activity data.



have created proxy records, these will need to be shown in the activity

reconciliation; otherwise PLICS will not reconcile to provider reports.

14. In your costing process do not include activity that is recorded in your data

feeds but whose incurred costs sit in another organisation. Report this activity

in ‘cost and activity reconciliation items’.

15. To reconcile the activity used in the system to that actually carried out by the

department/service, the activity count must be correct on the information

feeds. For example, if each line on the NAPC feed represents one contact, a

straight count of activity is adequate. If three separate lines on the feed

represent a single contact, the reconciliation report needs to aggregate these

lines to give an accurate activity count. Record this information in your costing

manual (Worksheet 1.1: PL activity feeds).


16. For collection, the provider’s PLICS quantum must reconcile to its final audited

accounts. See the 2017/18 mental health development PLICS cost collection

guidance for more information.

17. Reported hospital provider spell and care contacts must reconcile to your

MHSDS and IAPT submissions, with variances explained. An additional cost

group is required to identify services that are out of scope of the patient-level

collection extracts. See the 2017/18 mental health development PLICS cost

collection guidance for a list of these services.






97 | > CP6: Assurance of cost data

CP6: Assurance of cost data

Purpose: to ensure providers develop and maintain a high quality assurance process for costing and collection purposes.

Objectives

18. To provide assurance that:

• providers have implemented the standards and collections guidance

properly

• the costing principles have been applied in the costing process and outputs

• providers are maintaining a clear audit trail of the costing and collection

process

• processes are adequate to validate the accuracy of the data being

submitted in line with the Approved Costing Guidance

• opportunity has been provided for clinical review of the patient pathways

and cost data.79

Scope

19. All costing processes and outputs produced by the provider.

Overview

20. There are several ways to provide assurance on the costing and collection

process, including:

79

Later versions of the standards will require clinical review, but having taken feedback, developing these review processes is the goal.



• formal audit of process and submission by the providers’ internal and

external auditors

• evidence demonstrating:

– compliance with the standards and associated guidance

– users’ review of cost data

– use of the cost information to support decision-making (eg cost

improvement plans, returns to regulators, local prices)

– minutes of regular user/working group meetings.

21. The assurance process should be an integral part of producing cost

information. Producing an audit trail covering assumptions, decisions and

reviews should be part of the process. This will enable the organisation to

demonstrate it has adequate processes in place for ensuring the accuracy of

cost information, both to internal and external users.

22. Many stakeholders require assurance:

• the executive team in its strategic decision-making

• clinicians and their operational managers in analysing activities and clinical

procedures

• external stakeholders who may make varied use of the information.

23. The level of evidence should be sufficient to support the reason for making the

change. It will also allow updates and changes to be made to the costing

processes and can be described in your costing manual (Worksheet 12.2:

Decision audit trail), showing why processes have been changed. This will

support the assurance process for the board when submitting the costing

submission. It can also help identify areas where costing needs to be

improved, based on findings that could not be completed in time for

submissions.

24. We provide several tools to help develop and maintain an assurance process

that will promote continued improvement of costing in your trust. Figure CP6.1

shows examples of these.



Figure CP6.1: Assurance tools




• Costing principle 4: Good costing should involve transparent processes

that allow detailed analysis

• Costing principle 7: Good costing should engage clinical and non-clinical

stakeholders and encourage use of costing information

• Costing manual template80

• Standards gap analysis template

• Information gap analysis template

• Costing assessment tool for mental health

• Data validation tool

• Data quality tool

• Access to NHS Improvement’s PLICS portal.

Approach

Good documentation of all costing processes

25. You should use our tools to document the costing processes used in your

organisation to produce the cost information. In particular:

• The costing manual helps document compliance with the standards. It will

record where your have made local adjustments and the reasons why. It

will also ensure your organisation retains costing knowledge and expertise

when costing practitioners change.

• The standards gap analysis template summarises the costing process

standards (CPs) and the costing methods (CMs) to help your organisation

plan and prioritise implementing the standards.

• The information gap analysis template helps assess the gaps between

the information collected and what the information requirements standards

(IRs) require. This will help discussions between informatics teams and

costing practitioners on assessing and closing the gaps identified.

• The costing assessment tool (CAT) for mental health81 helps providers

to understand and record their progress in the implementation of the

80

These tools/templates are available on our website. 81

This tool is under construction and will be available in the next few months. The current CAT is designed for acute services, but mental health providers can use it as guide.




costing standards. It will help you focus your attention on areas to develop

and improve based on their materiality.

• Spreadsheet: Transition path describes a three-year plan for

implementing the standards.

• Table CP6.1 at the end of this standard is an example of a checklist to help

you develop an assurance process.

26. Documenting all costing processes effectively brings benefits that include:

• being able to show the assumptions and source data to end users, which

will improve the outputs’ credibility and increase confidence in their

usefulness

• a clear audit trail – an integral part of good documentation – will facilitate

reconciliation and assurance, as well as provide evidence for the

management of the overall process; it will also provide a template for

improving future calculation of costs

• understandable assumptions that can more easily be challenged, leading to

improvements in the costing process.

Assurance on the quality of costing processes and outputs

27. Costing is a material and significant system in providers as it supports national

and local pricing processes, and generates the underlying data for business

and investment decisions. Therefore we expect providers to ensure costing is

included in internal and external audit. This will provide assurance on the

accuracy of cost data for its internal and external users.

28. It is important to remember that understanding the costs of delivering services

is fundamental to providers managing their financial position and to their

business planning. This is why it is recognised that unless cost information is

linked to the organisation’s ongoing management, it will not accurately reflect

the services being delivered.

29. The more that services use cost information, the more they will understand the

cost data and how it has been calculated. This in turn will build their

confidence in the cost information produced for their service. This is why it is

vital to offer an opportunity for services to review and give feedback on their

cost data.



30. Cost information should be owned by senior managers and clinicians. The

finance function needs engagement from across the organisation if it is to

provide meaningful support.

Costing user group

31. An example of best practice in engaging stakeholders is to form a ‘costing

user group’ with executive and clinical membership. Ideally the chair would be

a clinician.

32. Such a group’s overall purpose is to improve the quality of cost information

and oversee, provide ideas for, and encourage and evaluate the use and

understanding of cost information in the organisation.

33. It can achieve this by:

• reviewing cost information and the cost submission

• reviewing the quality and coverage of underlying data

• reviewing the costing processes

• agreeing priorities for reviewing and developing the system.

34. To assist with this, the group should be supported by members from:

• IT (technical services)

• informatics (information services)82

• clinical coding (if relevant)

• finance

• service management

• other care professions including senior nursing

• E&T

• senior nursing

• a clinical champion (any discipline).

35. This type of review should be part of a rolling programme rather than one-off

as part of a national annual collection.

82

IT technical services and information services may be form one department or separate. Regardless, as both elements are so critical to PLICS, both should be appropriately represented.



Regular assurance processes

36. You should have a rolling programme of reviewing the costing processes and

outputs to provide assurance that the costing information is sufficiently

accurate for its intended use. The effort applied to this type of validation

should be proportionate to the significance of the costs being measured, and

to the costing purpose, in line with the principle of materiality.

37. It is important for you to work with clinicians, other care professionals and

service managers so you can:

• understand all the resources and activities involved in delivering patient

care

• understand the information sources available to support costing

• identify the expected costs associated with that care

• ensure that this is reflected in your costing processes within your costing

system.

38. Effective board engagement with costing is a prerequisite for improving and

making better use of patient-level cost information. Boards have an important

role in securing greater engagement between clinical and costing staff.

39. Effective executive support will also lead to more and better governance,

including documenting and defining policies and procedures.

40. The director of finance signs off the cost submission as part of the self-

assessment checklist. This is on the provider’s behalf and confirms the trust

has completed all required actions to ensure the submission’s accuracy.

Assurance on the reconciliation to other information sources

41. Reconciliation to financial and activity sources is an important part of providing

assurance on the quality of the costing outputs. It is important to provide

assurance that a single source of data is used for all decision-making. Follow

the guidance in Standard CP5: Reconciliation to ensure you are reconciling to

the appropriate information sources, and Spreadsheets CP5.1 and CP5.2.



Assurance on the quality of the cost submission83

42. We provide tools to help you with the quality of your cost submission. These

include:

• The self-assessment checklist: ensures providers are reviewing their

data quality, and includes executive review and sign-off and minimum

expected quality checks.

• The PLICS data quality tool: reviews the submitted cost data, quickly

identifying quality issues, and informs providers if resubmission is required.

Providers will receive a quality/index report to help inform their costing and

to investigate their data.

• The data validation tool: comprises mandatory validations that indicate

whether the submission will fail based on the field and values formatting

requirements for uploading the data. The tool also includes checks where

analysing the data reveals warnings about expected outputs. These

warnings are non-mandatory and should lead your investigation, validation

and assurance of the cost data uploaded.

Comparison with peers

43. The PLICS portal will allow providers to review their submitted data and

anonymously compare their outputs to their peers. This allows providers to

focus on their outlying areas and review the activity and costing for these. The

PLICS portal will provide a suite of reports that focus on the areas where

providers can improve the costing and assurance of their data.84

44. The data validation tool provides a baseline analysis of warnings that give

assurance that all providers submitting data have input data that is

comparable and subject to the same validations as their peers. The work that

follows the warnings generated from the data validation tool will give additional

assurance that providers have investigated and corrected their data to best fit

the expected costs of the submission and those of their peers. You should

have a rolling programme of local exercises to regularly compare your

organisation with its peers.

83

Information on these tools and where to find them is given in 2017/18 mental health development PLICS cost collection guidance.

84 The portal is only available to those providers that have submitted PLICS data.





Costing assurance programme85

45. The aim of the assurance process is to provide evidence of the work

undertaken and the reasoning behind the decisions made. As such, the audit

trail, evidence of meetings, discussions with clinicians, etc should be

maintained but not an end in itself.

46. Providing evidence for an external assurance audit should not be the main

purpose for collecting this information.

47. The evidence provided should also be in harmony with the costing principles.

Example: An assurance checklist

As part of the ongoing assurance process you should use a checklist. Table CP6.1

is an example of a costing assurance checklist. When used, your specific dates

should be added to each line.

CP6.1 Example of a costing assurance checklist

Month Process stage Checklist Completed

1 Implementation of the standards

Standards and associated guidance read by costing team


Relevant standards shared and discussed with relevant departments, eg:

• Standards IR1: Collecting information for costing and Standard IR2: Managing information for costing, shared with informatics

• Standard CP2: Understanding the general ledger, shared and discussed with finance colleagues

• Standard CP5: Reconciliation, shared with your software supplier to ensure system can produce their reports

• CM standards, reviewed with relevant departments

85

Details of the annual costing assurance programme, including the scope of services included, are given in the Approved Costing Guidance.





Complete the information gap analysis template


Complete the standards gap analysis template


Set up costing manual


Identify areas to work on to improve the quality of costing for this cycle (implementation of standards through to collection)


Sense check identified areas against the costing principles


Meet clinicians and other care professionals and service managers to acquire understanding and information needed to inform the costing process


Inform and agree with executive management the costing development approach you are taking for this cycle eg:

• following the transition path in the Approved Costing Guidance

• focusing on areas of local importance

3 to 6 Implementation of the standards

Implement developments in the costing system


Document processes, assumptions made, etc


Revisit and refine assumptions with clinicians and other care professionals and service managers to ensure understanding is correct and will provide meaningful results


Sense check refinements against the costing principles

6 to 9 Implementation of the standards

Implement developments in the costing system


Sense check first results from implementation developments with




clinicians and other care professionals and service managers


Update executive management on first results

10 to 12

Implementation of the standards

Update costing system on refinements from sense check

11 Preparing for the collection

Prepare for collection – review collection guidance again


Prepare submission using:

• self-assessment checklist

• data quality tool

• data validation tool


Run the reconciliation reports in Standard CP5: Reconciliation to ensure financial and activity values reconcile


Sense check costing outputs and reconciliation reports in line with the costing principles


Complete the costing assessment tool


Obtain executive management sign-off of the submission

12 Post submission and before next implementation phase

Update the costing manual

Post month 12

Post submission and before next implementation phase

Do peer comparison to identify outliers and to inform next cycle of costing development

© NHS Improvement 2018 Publication code: CG 61/18

Contact us:

NHS Improvement

Wellington House

133-155 Waterloo Road

London

SE1 8UG

0300 123 2257

[email protected]

improvement.nhs.uk

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